The Petroleum Division has begun efforts to replace the existing gas tariff structure, which uses 12 customer-category slabs, with a single uniform rate, while the transition would be based on subsidies for vulnerable and protected consumers rather than providing them cheaper gas based on use. According to top official sources, Federal Minister for Petroleum and Natural Resources Ali Pervaiz Malik and his team have stepped up efforts to push through sweeping reforms of the gas tariff system.

Under the proposed arrangement, protected consumers would no longer receive cheaper gas merely because they fall within a particular consumption slab. Instead, eligible low-income households would be provided with targeted financial assistance based on their income. The proposed single average gas tariff of Rs1,708 per MMBtu would apply across the board - not only to high-end domestic consumers but also to CNG stations, cement manufacturers and commercial and industrial users.

The reform would abolish the cross-subsidy and replace consumption-based gas subsidies with targeted, income-based assistance through BISP, shifting the basis of support from how much gas a household uses to how much it earns. Top officials of the Petroleum Division have sent a summary to the Cabinet Committee on Energy (CCoE), seeking the release of Rs162 billion for targeted subsidy. The issue is likely to be taken up during the IMF's fourth review in September-October 2026.

The average gas tariff currently stands at around Rs1,708 per MMBtu, and following implementation of the new regime, all categories of consumers are expected to move towards this uniform average tariff. At present, cross-subsidies worth around Rs160 billion are being financed through higher tariffs imposed on a number of consumer categories, including captive power plants (CPPs) operated by export industries, general industry, commercial consumers, CNG stations, cement manufacturers and high-end domestic consumers.