ISLAMABAD: The Petroleum Division informed the National Assembly that gas consumption by industrial Captive Power Plants (CPPs) has sharply declined—by approximately 80% in the SNGPL network and 43% in SSGCL’s system—primarily due to increased gas tariffs and levies. This reduction, amounting to around 216 MMCFD, is expected to worsen as more CPPs transition to the national grid, raising fears of a growing surplus of re-gasified liquefied natural gas (RLNG) and further exacerbating the circular debt crisis.
In a written reply to MNA Ali Muhammad, Minister of State for Petroleum Ali Pervez Malik warned that surplus RLNG—imported under long-term, take-or-pay contracts—poses significant fiscal risks. Pakistan currently imports 10 LNG cargoes monthly under three contracts: five cargoes per month under the 2016 PSO-Qatar agreement, four under the 2021 PSO-Qatar deal, and one cargo via a 2017 PLL-Eni contract.
To address the surplus, PSO has invoked annual downward flexibility to defer five cargoes from Qatar for 2025, the maximum allowed under the Sale Purchase Agreement. Additionally, 11 cargoes under the PLL-Eni contract have been diverted outside Pakistan.
Due to port capacity limitations, LNG terminals cannot consolidate all imports, with Terminal 1 (SSGC) and Terminal 2 (PLL) managing six cargoes each per month.
Despite mounting pressure, the government is unlikely to reverse the gas price hike due to commitments made with international lenders. These agreements mandate market-based pricing and subsidy reductions to promote energy efficiency and reduce circular debt.
