𝐆𝐨𝐯𝐭 𝐬𝐞𝐞𝐤𝐬 𝐨𝐯𝐞𝐫𝐡𝐚𝐮𝐥 𝐨𝐟 𝐠𝐚𝐬 𝐬𝐮𝐫𝐜𝐡𝐚𝐫𝐠𝐞 𝐥𝐚𝐰 𝐭𝐨 𝐭𝐚𝐜𝐤𝐥𝐞 𝐝𝐞𝐟𝐚𝐮𝐥𝐭𝐬, 𝐜𝐢𝐫𝐜𝐮𝐥𝐚𝐫 𝐝𝐞𝐛𝐭

ISLAMABAD: The government is seeking comprehensive amendments to the decades-old Gas Development Surcharge (GDS) law to strengthen recovery from defaulting consumers, account for situations where gas is sold below cost and address regulatory gaps contributing to a gas-sector circular debt that has crossed Rs3.5 trillion.

According to the Aug 17 schedule of the National Assembly, Petroleum Minister Ali Pervaiz Malik will present to the National Assembly on Monday (today) the Natural Gas (Development Surcharge) (Amendment) Bill, 2026, for making amendments to the Natural Gas (Development Surcharge) Ordinance, 1967.

The bill seeks to amend the 1967 ordinance in light of the new regulatory regime that became applicable after the creation of Ogra in 2002.

Official sources explained that the GDS system had been introduced to recover the differential margin that was incurred when the sale price of gas at consumer end was higher than that approved by Ogra.

Nevertheless, the law has not been able to evolve with market changes especially in cases where governments postpone the updating of tariffs.

This problem has resulted in the development of a “negative GDS”, which is negative differential margin, in case consumer end selling prices are lower than the real cost of gas. The current laws do not contain any provisions for compensating this negative margin while positive GDS is shared between the provinces based on their gas output.

The legislative loopholes have also caused frequent objections on audits related to the timing and discretion of gas companies while paying their GDS and surcharge.

There are also problems with a considerable amount of arrears owed on behalf of GDS revenues in the form of not only principle amounts but also Late Payment Surcharge (LPS) from dedicated power plants entangled in circular debt of the power sector.

Circular debt of the gas sector has also grown beyond Rs3.5 trillion.

In order to remove the anomalies in the situation, this proposed bill intends to amend the definition of “sale price” and “prescribed price” and include them in the statutory ambit of Ogra.

This bill also aims to define the terms “negative differential margin” and “Late Payment Surcharge” for situations where the Government holds consumer tariffs lower than the prescribed costs.