Pakistan Seeks to Reform Gas Sector Law Amid Rs3.5 Trillion Debt
The federal government is seeking to amend the decades-old Gas Development Surcharge (GDS) law to address regulatory gaps that have contributed to the gas sector's circular debt exceeding Rs3.5 trillion.
Petroleum Minister Ali Pervaiz Malik will present the Natural Gas (Development Surcharge) (Amendment) Bill, 2026 in the National Assembly on Monday.
The proposed legislation aims to bring the Natural Gas (Development Surcharge) Ordinance, 1967 in line with the modern regulatory framework introduced after the establishment of the Oil and Gas Regulatory Authority (Ogra) in 2002.
The existing law has failed to keep pace with changes in the gas market, particularly when governments delay revisions to consumer tariffs. This can result in a 'negative GDS', or negative differential margin, when the price charged to consumers falls below the actual cost of gas.