Ministry seeks govt support for cross-subsidy

According to The Express Tribune, the Petroleum Division has asked the federal government for budget funds to absorb the cost of cross-subsidy on domestic gas. The request was tabled at a recent Cabinet Committee on Energy meeting chaired by Prime Minister Shehbaz Sharif, which pegged the FY2026-27 cross-subsidy at Rs160 billion for protected consumers.

The ministry wants that budget support to fund tariff relief for industries, commercial users, CNG stations, cement producers and bulk domestic buyers. Beyond the subsidy, it has sought cabinet backing to clear legacy arrears on indigenous gas and liquid fuel supplied to power producers, settle RLNG actualisation tariff dues, and resolve pending GST refunds with the FBR. It also asked for a political committee to deal with unaccounted-for gas and theft at SSGC in Balochistan.

Protected domestic consumers pay between Rs200 and Rs350 per mmBtu and are projected to run a combined deficit of Rs161.9 billion, including Rs81.2 billion linked to Sui Northern Gas Pipelines and Rs80.7 billion to SSGC. By contrast, CNG users and processing industry consumers are expected to produce surpluses of Rs31.3 billion and Rs49.8 billion. Authorities have already committed to the IMF to withdraw cross-subsidy and fund direct subsidies through the budget.