ISLAMABAD: The government is set to lift the long-standing ban on new gas connections, but at a significantly higher cost — with consumers charged at imported LNG rates of around Rs3,900 per million British thermal unit (mmBtu) and a fourfold increase in connection fees.
A summary prepared by the petroleum division has been submitted to the federal cabinet, proposing 120,000 new connections in the first year. Priority will be given to applicants who had previously paid fees or demand notices but were denied service due to the moratorium. About 250,000 such applicants will now be required to submit affidavits waiving legal claims before reapplying.
The revised fee is expected to be set at Rs40,000–50,000 per connection, compared to the earlier Rs5,000–7,500 standard fee and Rs25,000 for urgent connections. These consumers will be billed at notified re-gasified LNG (RLNG) rates, currently Rs3,200 per mmBtu before taxes.
Officials argued that LNG-based piped gas would still be cheaper than liquefied petroleum gas (LPG), priced at around Rs5,300 per mmBtu, widely used by lower-income households in off-grid areas.
The moratorium on new connections, first imposed in 2009, was briefly relaxed before being re-enforced in 2022 amid supply shortages. However, a surplus of imported LNG, reduced power sector consumption, and sovereign commitments worth billions of dollars have forced the government to explore new demand avenues.
Currently, more than 3.5 million applications for new connections are pending with gas utilities. While new connections provide guaranteed returns on pipeline infrastructure, they also risk aggravating gas shortages, system losses, and revenue gaps already estimated at Rs200 billion annually.
Energy experts warn that diverting LNG to residential consumers at such high costs could worsen the circular debt in the petroleum sector, discourage domestic exploration, and further burden households with soaring energy prices.
Story by Khaleeq Kiani
