ISLAMABAD: Despite Pakistan facing a natural gas and LNG glut, the government is moving towards imposing a captive power gas levy to ensure a “level playing field” between public and private sector gas suppliers.
This development comes as Sui Northern Gas Pipelines Limited (SNGPL) continues unannounced rationing for residential and commercial consumers — even in summer — while simultaneously curtailing supplies from local producers. More than 300 mmcfd of cheaper domestic gas has been shut in, forcing producers like OGDCL, GHPL, and others to cut output, causing heavy financial losses and stalling exploration projects.
Ironically, while Pakistan has sought deferment of over 170 LNG cargoes due to oversupply, SNGPL has instructed local fields to reduce output to make space for costly LNG imports under binding contracts. Consumers, meanwhile, face surging gas bills after fixed monthly charges were doubled from July 1, 2025 — with Rs450 worth of consumption often resulting in bills close to Rs2,500.
The conflict deepened when the petroleum division allowed producers such as MOL Pakistan and PEL to sell gas directly to third parties. SNGPL resisted these arrangements, citing “market distortion,” particularly around supply from the Razgir field, though its own board had approved the allocation.
Amid infighting, the Ministry of Law has ruled that the new captive power levy will apply to all consumers of LNG or local gas — regardless of whether it is supplied by public or private entities. While gas sales from producers to suppliers remain deregulated, sales to captive power producers must be priced and levied under Ogra’s jurisdiction in line with the Levy Act of 2025.
With the energy sector’s circular debt crossing Rs4.6 trillion, the new levy reflects the government’s attempt to stabilize revenues. However, it also underscores the paradox of rationing gas at home while sitting on surplus supplies.
Story by Khaleeq Kiani
