Gas Connection Fee Hike: New Connections Possible

Pakistan to Lift Gas Connection Ban, But at a ⁣Price

Islamabad – After years of a frustrating moratorium, the Pakistani government is poised to lift ⁣the ban on new gas connections, offering a lifeline to over 3.5 million applicants currently on waiting lists. Though, this relief comes with a critically ⁢important financial burden: new connections will be priced at around⁣ Rs3,900 per million British ⁢thermal units ‍(mmBtu) – roughly four ⁤times the current connection fee.

The petroleum division has submitted a summary to the federal cabinet proposing the lifting of the ban,with‍ an initial target of 120,000 new connections ‍in the first year. Priority will be given to those who previously received demand notices or paid urgent fees but were unable to secure connections due to the previous restrictions.

this move comes amid a continuing glut in the gas network,and a desire to address growing public dissatisfaction. Prime Minister Shehbaz Sharif recently‍ expressed his displeasure with the delays in⁢ providing new connections.

A Costly Connection

The new connection fee is expected to ⁤range between Rs40,000 and Rs50,000, a substantial increase from the previous Rs5,000-Rs7,500 or the Rs15,000 for expedited connections. Consumers will also be billed at the re-gasified ‍liquefied natural gas (RLNG) price, currently around Rs3,200 per mmBtu, bringing the total cost to approximately Rs3,900-Rs4,000 per mmBtu, including taxes. This is still cheaper than Liquefied petroleum gas (LPG), which currently costs around Rs5,300 per mmBtu.

Balancing Act: Supply, Demand, and Finances

The moratorium on ‍new connections was first imposed in 2009, briefly lifted in 2015, and then reinstated in 2022 due to escalating gas shortages. While new connections offer ⁣gas companies a guaranteed return on their infrastructure investments, they also contribute to increased gas losses and reduced revenue recovery, exacerbating existing shortages, particularly during winter.

Currently, Sui Northern, the gas distribution company serving Lahore, is already rationing gas supplies, providing domestic consumers ⁤with onyl 6-9 hours of gas per day – typically ‍during breakfast, lunch, and dinner.The recent 50% ⁣increase in fixed⁤ charges, effective July 1, 2025, is seen as a further attempt to bolster revenue without a corresponding increase in gas supply.

A Complex Landscape

Pakistan’s energy sector faces significant challenges, including a reliance on imported LNG and a growing demand for gas. The government is navigating ⁢a delicate balance between ⁢providing access to essential energy resources and ensuring the financial viability of its gas companies. This latest move, while offering relief to millions, underscores the increasing cost of energy ⁤in the country and the need⁤ for long-term solutions to address the underlying supply and ⁤demand⁢ imbalances.