Govt Forms Four Panels to Tackle Gas Sector Challenges

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Oil-Gas

ISLAMABAD: The government has constituted four specialised sub-committees to address critical issues plaguing Pakistan’s gas sector, including circular debt, LNG tariff structures, unaccounted-for gas (UFG) losses, and the rising share of imported LNG in the national gas system.

The initiative falls under the broader mandate of the Committee on Implementing Structural Reforms in the Petroleum Sector, chaired by the Minister for Petroleum and Natural Resources and formed by the Prime Minister. The committee includes key officials such as the Advisor to the PM on Privatisation, National Coordinator on Energy Reforms, Secretary Power Division, Secretary Petroleum Division, Secretary Cabinet Division, and the Chairman of OGRA.

During recent meetings, the Minister stressed the need to shift from analysis to actionable reforms, using insights from the Integrated Energy Study conducted by Wood Mackenzie (Woodmac). The aim is to align recommendations with the 2026 Annual Delivery Plan (ADP) and ensure LNG supply consistency without creating imbalances in demand.

The four sub-committees formed are as follows:

  1. LNG-Power Synchronisation Sub-Committee (led by Secretary Power) will propose mechanisms to match LNG supply with the power sector’s needs, minimize abrupt demand fluctuations, and review Net Proceeds Differential (NDP) claims due to reduced offtake.
  2. Circular Debt Sub-Committee (led by Muhammad Ali with input from KPMG) will formulate solutions to address the mounting circular debt within the gas sector.
  3. LNG Tariff Rationalisation Sub-Committee will review all components of the LNG pricing structure—terminal charges, importer margins, and service agreements—and propose strategies to increase RLNG consumption, especially in the domestic sector.
  4. Domestic Gas Tariff and UFG Sub-Committee will focus on improving efficiency and transparency in domestic gas pricing, reassessing revenue requirements, UFG losses, and revising the return-on-assets formula for Sui gas companies.

The Chair emphasised that the committees should focus on implementation-driven strategies to ensure long-term sustainability of Pakistan’s energy and gas sectors.

Story by Mushtaq Ghumman

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