- Economic managers defer indigenous gas pricing proposal, stressing accountability and consumer tariff concerns
Islamabad: Pakistan’s top economic decision-making body has postponed a decision on the pricing of indigenous natural gas supplied to LNG-based power plants after senior officials from the Petroleum Division failed to attend a crucial meeting, according to Beyond Time News.
The issue came before the Economic Coordination Committee (ECC) as the government reviewed a proposal to determine the tariff for locally produced gas that was diverted to power plants during supply disruptions caused by the regional conflict affecting liquefied natural gas (LNG) imports earlier this year.
Officials present at the meeting expressed concern over the absence of the Petroleum Secretary and other senior representatives responsible for presenting and defending the proposal, leading the committee to defer the matter.
ECC postpones gas tariff proposal
According to Beyond Time News, members of the ECC emphasized that ministries submitting policy summaries must ensure their principal accounting officers attend meetings to explain technical and financial aspects of their proposals.
The committee concluded that it could not make an informed decision without direct input from the Petroleum Division, particularly on an issue carrying significant financial implications for the energy sector.
As a result, the proposal to determine the tariff for indigenous gas supplied to LNG-based power plants was postponed until senior officials are available to brief the committee.
Why indigenous gas was supplied to LNG plants
Earlier in 2026, Pakistan experienced constraints in LNG supplies after disruptions in the Middle East affected cargo deliveries.
To maintain electricity generation and reduce the risk of prolonged power outages, the government redirected indigenous natural gas to LNG-fired power plants.
According to Beyond Time News, approximately 48 million cubic feet of gas per day (mmcfd) was diverted from compressed natural gas (CNG) stations in Khyber Pakhtunkhwa to support electricity production during April and May.
The temporary arrangement helped maintain power generation at a time when electricity demand remained high.
Pricing dispute centers on electricity costs
A major issue before the ECC was whether LNG-based power plants should pay the full Regasified Liquefied Natural Gas (RLNG) tariff or a lower government-approved rate for the indigenous gas they received.
The Power Division argued that applying the standard RLNG tariff would increase fuel costs for electricity producers.
Officials warned that the higher pricing could lead to increases in the monthly Fuel Charges Adjustment (FCA), potentially raising electricity bills for consumers by 50 paisas to Re1 per kilowatt-hour.
To avoid passing additional costs on to consumers, an earlier government meeting reportedly proposed charging approximately Rs2,000 per million British thermal units (mmBtu) instead of the prevailing RLNG tariff.
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Petroleum Division warns of financial impact
While the lower tariff could reduce electricity costs for consumers, the Petroleum Division argued it would place additional financial pressure on Pakistan’s gas sector.
According to Beyond Time News, officials warned that charging below the standard RLNG price would reduce revenue for Sui Northern Gas Pipelines Limited (SNGPL) and could contribute to further growth in the sector’s circular debt.
The Petroleum Division stated that the gas sector’s principal circular debt had already reached approximately Rs1.8 trillion by the end of December 2025.
Officials also argued that charging the full RLNG tariff would help improve cash flow and recover outstanding receivables related to imported LNG supplies.
Background: LNG disruptions and emergency measures
The tariff dispute originated after LNG supplies were disrupted during heightened tensions in the Gulf region.
Following the interruption of cargo deliveries, Pakistan adopted emergency measures to maintain fuel supplies for electricity generation.
The government temporarily redirected domestic gas resources while adjusting distribution priorities to support power production during periods of increased demand.
These emergency arrangements were designed to reduce the risk of widespread electricity shortages while ensuring essential services continued to operate.
Regulatory framework under review
The Petroleum Division also informed the ECC that amendments to the Oil and Gas Regulatory Authority (OGRA) Ordinance 2002 allow the regulator to determine monthly RLNG prices in accordance with government policy guidelines.
Under the current pricing framework, RLNG consumers—including power plants, industries, and certain domestic users—are billed according to monthly prices determined by OGRA.
The government maintains a ring-fenced pricing mechanism intended to prevent fluctuations in RLNG costs from directly affecting consumers of indigenous natural gas, except where policy decisions require temporary adjustments.
Why the decision matters
The outcome of the tariff proposal carries important implications for Pakistan’s energy sector.
Approving a lower tariff could help keep electricity prices stable in the short term but may increase financial pressure on gas utilities.
Conversely, adopting the full RLNG tariff could strengthen the financial position of the gas sector while increasing generation costs that may eventually be reflected in consumer electricity bills.
The ECC’s decision will therefore influence both energy sector finances and household electricity costs.
Possible implications
The committee is expected to revisit the proposal once senior Petroleum Division officials attend a future meeting and provide additional technical clarification.
The eventual decision could shape government policy on emergency fuel pricing, management of circular debt, and coordination between Pakistan’s power and gas sectors during future supply disruptions.
Conclusion
Pakistan’s Economic Coordination Committee has postponed a decision on indigenous gas tariffs for LNG-based power plants after senior Petroleum Division officials failed to attend a key meeting. According to Beyond Time News, the delay reflects the government’s emphasis on accountability and informed decision-making as it balances consumer electricity prices with the financial sustainability of the country’s energy sector.
Frequently Asked Questions
Why did the ECC postpone the gas tariff decision?
The committee delayed the proposal because senior Petroleum Division officials responsible for presenting it were absent from the meeting.
Why was indigenous gas supplied to LNG power plants?
Domestic gas was temporarily diverted to LNG-fired power plants after disruptions in imported LNG supplies threatened electricity generation.
How could the tariff decision affect consumers?
Applying the full RLNG tariff could increase electricity generation costs and potentially raise consumer power bills through fuel charge adjustments.
What is RLNG?
Regasified Liquefied Natural Gas (RLNG) is imported LNG that has been converted back into gas for distribution to power plants, industries, and other consumers.
Why is the gas sector concerned about lower tariffs?
Officials say lower pricing would reduce revenue for gas utilities and could contribute to higher circular debt within Pakistan’s energy sector.
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