No gas price hike from January 2026: Petroleum Minister

ISLAMABAD: The federal government has decided not to increase gas prices further from January 1, ARY News reported.

Federal Minister for Petroleum Ali Pervez Malik shared this update during a briefing to the National Assembly Standing Committee on Petroleum on Tuesday.

The Minister informed the committee that, following the Prime Minister’s directives, gas prices will not be raised from January 2026.

Malik stated that the gas circular debt is no longer rising, though it currently stands at Rs 3 trillion, a figure that includes Late Payment Surcharges (LPS). He also noted that Qatar has maintained its contract conditions despite the challenging global situation.

Regarding supply, the Minister mentioned a discrepancy in demand from the Power Division. While the division reports a daily demand of 800 million cubic feet, it typically only utilizes 400 million cubic feet.

He suggested that the Minister for the Power Division could provide further clarity on that specific situation, adding that the government is working toward bringing the circular debt to zero while maintaining current gas rates.

Earlier, the last year in December, the government is considering increasing the petroleum levy by Rs5 per litre as part of a strategy to settle Rs1.7 trillion in gas sector circular debt, sources said.

Under the proposed plan, the debt would be retired over the next six years by raising approximately Rs550 billion through additional levy collections, utilising dividends from state-owned gas companies, and diverting savings achieved by reducing the number of imported LNG cargoes.

The total gas sector circular debt currently stands at around Rs3.18 trillion, of which Rs1.7 trillion is planned to be settled under the strategy. Of this amount, approximately Rs1.4 trillion comprises non-recoveries, line losses, and tariff differentials, while about Rs300 billion relates to taxes and interest.

According to the proposal, dividends received from gas companies would be redirected to help clear the circular debt. The additional Rs5 per litre petroleum development levy (PDL) on petroleum products is expected to generate around Rs550 billion.

The plan to eliminate the gas sector circular debt will be submitted for approval to the Prime Minister’s Office and the Ministry of Finance, sources added.