Govt Denies Gas Tariff Cut for Export Sectors

Islamabad, August 16, 2025, 03:41 PM PKT — The government has delivered a decisive blow, opting not to grant a concessionary gas tariff to zero-rated and export-oriented sectors amid ongoing litigation over tariff reductions, as per a recent news report. The Economic Coordination Committee (ECC), in a high-stakes meeting, ruled that concessionary tariffs, exhausted since 2023, cannot be further reduced without risking additional legal battles, directing the Commerce Division to fast-track the case with the Attorney General’s office. The move stems from a 2019 writ petition by Ghani Glass, seeking a Rs600 per million British thermal units (mmBtu) tariff for zero-rated sectors, naming the Petroleum Division, Oil and Gas Regulatory Authority, Sui Northern Gas Pipelines Limited (SNGPL), and Federal Board of Revenue (FBR) as respondents, with the Ministry of Finance and Ministry of Commerce added in April 2025.

The Lahore High Court mandated a 60-day deadline for the Ministry of Finance, alongside the Commerce Ministry and stakeholders, to present the Ghani Glass case to the ECC, debating whether glass qualifies as an export-oriented sector and if the concession applies retroactively to 2015. The Commerce Ministry noted that sectors like textiles, carpets, leather goods, and surgical instruments gained zero-rated sales tax status under SRO 1125(I)/2011, with tariffs extended in 2018, but the 2019 Finance Bill withdrawal left a gap, excluding glass due to negligible exports. The Commerce Ministry rejected Ghani Glass’s claim as unjustified, gaining ECC approval to deny the demand, with plans to consult the Attorney General. Web context on energy tariffs shows legal gridlock, while posts found on X reflect frustration—some decry unfairness, others question policy consistency. Critically, the narrative of “legal caution” may mask economic favoritism—web data hints at past disputes, and X sentiment suggests distrust in equitable decisions, pointing to potential backlash.