Key Takeaways
- Pakistan missed the July 1, 2026 deadline for notifying biannual gas tariffs.
- The delay is due to legal issues surrounding Ogra’s acting chairman and unresolved UFG targets.
- The government aims to issue consumer-end tariffs soon despite the technical breach.
Pakistan has missed its July 1, 2026 deadline for notifying biannual gas tariffs as required under structural benchmarks of the International Monetary Fund (IMF) under the $7 billion Extended Fund Facility (EFF).
The government faces a significant challenge in maintaining energy tariffs at cost-recovery levels due to over Rs3.44 trillion in circular debt within the gas sector.
Senior officials blame legal issues related to the appointment of Nabeel Ahmad Awan as the acting chairman of the Oil and Gas Regulatory Authority (Ogra). His appointment was challenged in court, complicating the process further.
Global energy prices have also played a role, adding volatility that affects the determination of gas tariffs. Ogra had to postpone public hearings on revenue requirements for gas utilities.
Under the Ogra law, the government is required to work out consumer-end gas tariffs within 40 days after the regulator determines annual revenue requirements through prescribed gas prices.
The acting chairman wanted specific UFG reduction targets for each custody transfer station (CTS) in both Sui Southern and Sui Northern network systems. This delay could be covered through subsequent revenue adjustments, officials said.
Despite the technical breach of the structural benchmark, Ogra is expected to soon issue its determination, allowing the government to work out consumer-end tariffs promptly.
The government and IMF have reached a consensus on reducing circular debt pressures and UFG by improving gas system tracking and infrastructure upgrades.
