The government is considering lifting the ban on new domestic gas connections as it looks into ways to make use of the surplus imported LNG.
According to sources cited, a study is underway to evaluate how restoring domestic gas connections would affect gas pressure and the financial impact of LNG imports.
Officials from the petroleum ministry noted that Pakistan’s long-term LNG supply agreement with Qatar will end in 2030.
After that, the country may need to spend around $4 billion each year on LNG imports to meet its needs.
The current review will also examine whether the cost of imported LNG can be recovered from household consumers. Presently, domestic users pay Rs1,800 per MMBtu, while imported LNG costs Rs3,500 per MMBtu.
Supplying imported LNG to households during winter months results in an annual financial loss of about Rs250 billion.
This surplus LNG situation has largely arisen because of a drop in demand from the power sector.
Due to this, around 300 MMCFD of locally produced gas is being withheld to avoid damaging the pipeline infrastructure.
Officials also said five scheduled LNG cargoes have already been delayed because of the surplus.
The ban on new domestic connections was first enforced in 2019 because of challenges in recovering costs and limited gas supply.
However, sources say the government could now potentially connect up to 4 million new consumers using the extra 300 MMCFD of available gas.
Currently, 3.5 million applications for new connections are pending, and if the ban is lifted, priority will go to the 300,000 applicants who have already submitted security deposits.
Once the ongoing study is completed, a formal summary will be sent to the Cabinet for approval. The final decision on whether to end the ban will rest with the Cabinet.