Govt to Allow New Gas Connections at LNG Price in Pakistan – Check more details

ISLAMABAD, August 18, 2025 — The federal government has decided to lift the long-standing ban on new gas connections in Pakistan, but applicants will now pay at imported LNG rates, currently around Rs. 3,900 per mmBtu, along with higher connection fees.

The Petroleum Division has submitted a summary to the federal cabinet, with a target of 120,000 new connections in the first year. Priority will be given to applicants who have already paid demand notices or urgent fees, nearly 250,000 people in total. However, they must first sign affidavits confirming that they will not approach courts over old claims and fee disputes.

Higher Connection Fees Introduced

Previously, applicants could secure a priority connection by paying Rs. 25,000, while normal fees ranged from Rs. 5,000 to Rs. 7,500. LNG-based connections cost Rs. 15,000. Under the new policy, the connection fee will increase to Rs. 40,000–50,000.

Currently, over 3.5 million applications are pending with Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC). While new connections can generate higher pipeline revenues, they also increase winter shortages. In Lahore and nearby areas, SNGPL supplies gas for only 6 to 9 hours daily. Meanwhile, fixed charges were raised by 50 percent from July 1, 2025, adding to household bills.

Background of the Ban

The ban on new gas connections was first imposed in 2009, lifted briefly in 2015, and then re-imposed in 2022. Recently, Prime Minister Shehbaz Sharif criticized the delays and ordered reforms. Under the revised plan, households will now pay LNG-based tariffs of Rs. 3,200 per mmBtu, rising to Rs. 3,900–4,000 after taxes.

For comparison, LPG costs Rs. 5,300 per mmBtu, making LNG piped gas nearly 40 percent cheaper.

Challenges Ahead

Officials say surplus LNG in the pipeline system is creating risks for infrastructure and global contracts. Allowing new connections will help absorb excess supplies. However, Pakistan’s reliance on imported LNG adds heavy pressure on foreign exchange reserves.

The Oil and Gas Regulatory Authority (Ogra) has already approved Rs. 75 billion adjustments for past LNG costs, and further revisions are expected. Gas firms warn that diverting LNG to households adds Rs. 200 billion in circular debt every year.

Domestic gas production has also declined. Around 300 million cubic feet per day of local gas is shut down to accommodate LNG, causing weekly losses worth billions and slowing new exploration.

Additionally, Pakistan faces surplus LNG cargoes under long-term contracts with Qatar. Some shipments were delayed last winter and are now scheduled for delivery in FY2026.

The return of new gas connections in Pakistan provides relief to applicants who have been waiting for years. However, the higher LNG prices, rising connection fees, and economic strain from imports highlight the challenges the government faces in managing the country’s growing energy crisis.