The government has assured the International Monetary Fund that the Rs140 billion cross-subsidy currently provided to gas consumers will be phased out by January 2027 as part of broader economic reforms.
According to senior officials of the Petroleum Division, the existing subsidy mechanism offers reduced gas tariffs to protected and some non-protected consumers, while the financial burden is borne by industries, commercial users, CNG stations, the cement sector, and high-consumption domestic users.
Under the proposed reforms, subsidies for gas and electricity will no longer be based on consumption levels. Instead, financial assistance will be linked to household income, with data from the Benazir Income Support Programme being used to identify eligible low-income families.
Officials said all consumers would eventually pay a uniform average gas tariff, while deserving households would receive direct government support. The current average gas tariff stands at Rs1,750 per MMBtu, whereas protected consumers are paying significantly lower rates.
Separately, Federal Finance Minister Muhammad Aurangzeb held an important meeting with the IMF mission in Islamabad to discuss Pakistan’s economic situation, the upcoming federal budget, and ongoing reform measures.
The IMF delegation was led by Mission Chief Eva Petrová. The meeting was also attended by the State Bank governor, finance secretary, chairman of the Federal Board of Revenue, and other senior officials.
Both sides continued consultations on the wider economic reform agenda, with expectations that the upcoming budget will focus on fiscal discipline and macroeconomic stability.
