ISLAMABAD: In a move aligned with the International Monetary Fund’s (IMF) structural benchmarks, the Economic Coordination Committee (ECC) of the federal cabinet on Friday approved up to a 50% hike in gas charges, effective from July 1.
Chaired by Finance Minister Muhammad Aurangzeb, the ECC endorsed a revised gas pricing structure for the fiscal year 2025–26, presented by the Petroleum Division. The decision includes an increase in fixed gas charges for all domestic consumers and raised rates for non-domestic users to bridge a revenue shortfall and meet IMF conditions.
For protected domestic consumers, fixed charges were raised from Rs400 to Rs600, while non-protected users will now pay Rs1,500, up from Rs1,000—a 50% increase for both categories. The ECC also abolished the one-slab benefit, meaning consumers will now be billed according to their respective tariff categories without any concessions.
Gas rates for bulk consumers were increased by 9.5%, from Rs2,900 to Rs3,175 per mmBtu. The power sector saw a 29% hike from Rs1,050 to Rs1,350 per mmBtu, and industrial (process) consumers will now pay Rs2,350 per mmBtu—up 9.3% from the previous Rs2,150.
The new pricing aims to generate an additional Rs72 billion from non-domestic consumers and close a revenue shortfall of Rs41 billion for FY2025–26. At the current rates (effective since February 1), estimated revenue stood at Rs847.7 billion, against a requirement of Rs888.6 billion as determined by OGRA.
A statement from the Ministry of Finance emphasized that the changes fulfill legal obligations under OGRA regulations and ensure compliance with IMF conditions, including replacing cross-subsidies with direct support through the Benazir Income Support Programme (BISP).
Supplementary Grants and Other Decisions
The ECC also approved supplementary grants totaling Rs856 billion. These included:
- Rs832 billion for the Ministry of Finance for debt repayment.
- Rs15.84 billion for the Ministry of Defence to cover shortfalls in salaries, allowances, and payments under the PM’s compensation package for martyrs.
- Rs5.5 billion for the Strategic Plans Division to support SUPARCO under rupee cover.
Sugar Import and Other Deliberations
The committee deferred a decision on sugar imports, referring the matter to a newly formed 10-member committee led by the Minister for National Food Security. The body is tasked with assessing the need for imports to stabilize local sugar prices.
Additionally, the ECC reviewed proposals to enhance home remittance schemes and directed the State Bank and Finance Division to present a finalized plan by July 31. It also granted in-principle approval to a risk coverage scheme for small farmers, aimed at bringing 750,000 new borrowers into the formal credit system and generating Rs300 billion in new agricultural lending over three years.
