Pakistan to lift gas connection ban, shift new supply to dollar-linked LNG

ISLAMABAD: Pakistan is set to lift its years-long ban on new gas connections nationwide but will supply imported liquefied natural gas (RLNG) to consumers priced in US dollars and linked to volatile international crude markets, without subsidies or price protection, a senior official told The News on Thursday.

A summary seeking prime ministerial approval has been moved, paving the way for household and commercial consumers nationwide to access gas connections for the first time since 2019, the official said. “The LNG price is pegged with crude oil and is dollar-based, so there will be no fixed tariff,” the official added. Although, the consumers will pay in rupees, but the price would be volatile with the change in LNG price and dollar price.

Applicants will need to provide security deposits and sign mandatory affidavits on stamp paper, pledging not to legally challenge the higher LNG-linked billing, officials said. Residential and commercial customers meeting federal eligibility criteria will qualify for new connections under the plan.

Pre-ban on connections, the cost of demand notice for domestic connection was around Rs4,000, but now it can reach up to Rs40,000, the official said.

The move follows a government directive to finalise a framework for new household and commercial connections after additional gas became available due to supply cuts to captive power plants and the power sector.

Gas connection approvals have remained suspended since 2019 due to shortages and low pressure. Officials say network losses have been curbed, and surplus gas has allowed the shutdown of some local fields, creating space for new consumers under the LNG regime. Gas connection approvals have been on hold since 2019 amid worsening shortages and declining system pressure. With domestic production shrinking, Pakistan increasingly relies on costly imported LNG, a trend now set to be formalized in household billing, shifting risk from the state to consumers.