Pakistan is poised to lift its long-standing ban on new domestic gas connections, a move aimed at addressing a backlog of over 3.5 million pending applications, according to a summary sent to the Federal Cabinet. The Petroleum Division’s proposal suggests issuing approximately 120,000 new connections in the first year, prioritizing applicants who previously paid fees or received demand notices but were denied connections due to the ban.

Around 250,000 applicants fall under this prioritized category and will be required to sign affidavits waiving potential legal action related to past claims or higher connection charges. The number of new connections is projected to rise in subsequent years. The proposal comes as Prime Minister Shehbaz Sharif has voiced concerns over delays in issuing new connections.

New connection fees are anticipated to be between PKR 40,000 and PKR 50,000, with consumers billed at the Regasified Liquefied Natural Gas (RLNG) rate, currently around PKR 3,200 per MMBTU. With General Sales Tax, the final price could reach PKR 3,900 to PKR 4,000 per MMBTU.

This new pricing structure puts RLNG-based piped gas at a 35% to 40% lower cost compared to Liquefied Petroleum Gas (LPG), which is currently around PKR 5,300 per MMBTU and widely used by lower-income households. High-end domestic consumers currently pay an average of PKR 3,300 per MMBTU for up to 300 cubic meters monthly and PKR 4,200 per MMBTU for consumption above 400 cubic meters.

While new connections will generate revenue through infrastructure charges, they also raise concerns about increased gas losses, reduced recovery rates, and intensified winter shortages. Sui Northern Gas Pipelines Limited (SNGPL) in Lahore has already started limiting supply to domestic users to 6-9 hours daily in anticipation of winter.

To generate additional revenue, fixed charges were increased by 50% on July 1, 2025. The initial ban on new connections was implemented in 2009, briefly lifted after six years, and reinstated in 2022 due to escalating supply deficits. The proposed resumption aims to reduce excess gas in the network, mitigating risks to infrastructure and ensuring compliance with international agreements.