Government Decides to Phase Out Gas Subsidy by January 2027

The government has decided to gradually abolish the Rs140 billion cross-subsidy provided to gas consumers, with all subsidies expected to end by January 2027.

According to sources, the new policy aims to shift subsidies on gas and electricity from usage-based support to income-based assistance. Under the proposed reforms, industries, CNG stations, commercial consumers, and the cement sector may receive relief from the additional financial burden currently imposed on them.

Sources said the government is considering implementing a uniform average gas tariff for all consumers, while low-income households would receive direct financial support instead of subsidized gas rates.

For the identification of deserving families, data from the Benazir Income Support Programme (BISP) will be utilized to ensure targeted subsidy distribution.

In Islamabad, the average gas tariff has been fixed at Rs1,750 per MMBTU, although protected consumers are still paying lower rates. Officials say the subsidy system will be transformed gradually under the new policy framework.