Officials' absence delays tariff decision
The country's economic managers expressed dismay over the absence of top officials of the Petroleum Division in a recent meeting and they refused to approve the tariff for indigenous gas supplied to liquefied natural gas (LNG)-based power plants amid the US-Iran war.
A member of the Economic Coordination Committee (ECC) told The Express Tribune that the Petroleum Division wanted the top economic body to approve a high tariff for the locally produced gas provided to LNG power plants when LNG supply from Qatar came to a halt because of the Middle East conflict.
The indigenous gas was provided to LNG plants in a bid to tackle extensive electricity load-shedding in April and May 2026 across the country. The government suspended the supply of domestic gas to compressed natural gas (CNG) filling stations in Khyber-Pakhtunkhwa (K-P) and diverted it to LNG power plants.
Sources said that when the matter was taken up by the economic decision-making body, it was informed that the petroleum secretary, the mover of the summary for gas tariff, was not present. Special secretary petroleum also did not attend the meeting.
It was pointed out that views and comments of the ministry concerned were not available, which were required to take a decision on the proposal. Keeping in view the situation, the ECC deferred the proposal for fixing a higher tariff for natural gas supplied to LNG power plants.
ECC members also directed the ministries and divisions that principal account officers, who moved summaries, must attend meetings to pursue their respective cases.
It was highlighted that the Oil and Gas Regulatory Authority (Ogra) had set the standard re-gasified LNG (RLNG) sale price at $12.4913 (Rs3,498) per million British thermal units (mmBtu) for March 2026, which was increased to $15.6237 (Rs4,375) per mmBtu for May 2026.
The Power Division argued that the imposition of the standard, notified RLNG tariff on indigenous gas provided from April to June 2026 would force power plants to file for upward revisions in fuel charges adjustment in the range of Rs0.5 to Re1 per kilowatt-hour (kWh), which would increase power tariffs for consumers.
In a bid to avoid the consumer tariff hike, a meeting, chaired by the prime minister, decided that Sui Northern Gas Pipelines Ltd (SNGPL) should charge a lower price of Rs2,000/mmBtu for the indigenous gas supplied to those plants, instead of the regular RLNG tariff. Later, the National Coordination and Management Council reviewed the proposal in May 2026.
The Petroleum Division cautioned that the collection of a lower proposed price instead of the full RLNG tariff would prevent the sector from earning additional revenues and would result in circular-debt accumulation in the gas sector, which stood at Rs1.8 trillion (principal amount) as of December 2025. It was also pointed out that the higher tariff would help SNGPL to clear its outstanding receivables against RLNG sales.
Following the eruption of a crisis in the Gulf in late February 2026, QatarEnergy declared a force majeure on LNG cargo supplies. In order to mitigate LNG shortage, the National Coordination and Management Council decided to provide indigenous gas for LNG power plants from April to June 2026, depending on its availability.
Complying with the decision, SNGPL re-directed 48 million cubic feet per day (mmcfd) of gas from CNG stations in K-P to meet the power sector's needs. Ogra's review of the estimated revenue requirement set SNGPL's average prescribed price at Rs1,853/mmBtu for FY26, subject to final settlement at the end of the financial year.
The Petroleum Division told the ECC that the government had amended the Ogra Ordinance 2002 by adding a new section, according to which the regulator would issue monthly prices for RLNG sales subject to policy guidelines established from time to time.
RLNG sales are ring-fenced so that they do not impact the indigenous gas pricing or regular consumers, unless RLNG is explicitly diverted to domestic users, which requires recovery via price adjustments twice a year. Consequently, all RLNG consumers (including power plants, industries and domestic users) are billed monthly based on prices set by Ogra according to the federal policy.