Pakistan's LPG Prices Surge to PKR 7,000 Amid Gas Crisis
The rising cost of LPG in Pakistan reflects deeper issues in the gas sector, with domestic production declining and debts soaring.
LPG prices in Pakistan have skyrocketed, with a domestic cylinder now costing nearly PKR 7,000.
The country's gas sector faces a circular debt of PKR 5.454 trillion, exacerbated by supply disruptions.
Pakistan's reliance on imported LNG is increasing, yet it struggles with both shortages and surpluses.
In a significant escalation of the ongoing gas crisis, the price of a domestic LPG cylinder in Pakistan's Balochistan province has surged from approximately PKR 4,500 to nearly PKR 7,000. This alarming increase is attributed to supply disruptions following the closure of key border crossings with Iran, which has left many households scrambling for affordable cooking fuel. Reports indicate that in some regions, LPG prices have soared to PKR 600 per kg, more than double the official rate set by the Oil and Gas Regulatory Authority (OGRA).
The current situation is not merely a result of recent events but highlights a long-standing issue within Pakistan's gas sector. Domestic natural gas production has been on a steady decline, dropping from 3,597 million cubic feet per day in FY2020 to 2,890 million cubic feet per day in FY2025, a nearly 20% decrease. This decline has led to increased reliance on costly imports, with the total circular debt in the gas sector reaching a staggering PKR 5.454 trillion as of June 30, 2026. The financial strain on the sector has been compounded by tariff gaps and delays in payments.
On October 21, 2026, it was reported that LPG prices had reached PKR 600 per kg in hilly areas, while the official price for an 11.8 kg domestic cylinder was set at PKR 3,296.23. The border closures at Gabd-Rimdan and Taftan have halted LPG imports from Iran, exacerbating the crisis. Traders noted that Pakistan typically imports around 7,000 metric tonnes of LPG daily from Iran, and the current situation has left many without reliable access to cooking fuel.
The implications of this crisis extend beyond household cooking. The Pakistan Institute of Development Economics (PIDE) has highlighted that the energy sector's challenges could disrupt electricity generation, fertilizer production, and industrial operations. With average daily gas consumption recorded at 3,143 million cubic feet during July-March FY2025, any shortfall can have cascading effects on various sectors, especially agriculture, which relies heavily on fertilizer production.
Looking ahead, the Pakistani government faces a complex challenge in balancing financial reform with consumer relief. While there have been discussions about restructuring gas subsidies and addressing the circular debt, the immediate future remains uncertain. The government has indicated that it will maintain gas prices for six months, but without addressing the underlying issues, temporary relief may only delay the next crisis. As the winter approaches, the need for a sustainable solution to Pakistan's gas crisis becomes increasingly urgent.
