ISLAMABAD: The Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) has sought the Ministry of Energy’s urgent intervention to resolve the issue of overdue receivables amounting to Rs 1.547 trillion owed to exploration and production (E&P) companies by Sui gas utilities, official sources told Business Recorder.
In a letter addressed to the federal minister for energy, the secretary, and other senior officials, PPEPCA referred to its earlier correspondence dated August 22, 2025, highlighting the continued default by Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) in settling invoices of upstream companies.
The association underscored that Pakistan’s upstream oil and gas sector—currently producing around 2,684 MMscfd of gas, meeting over 30 percent of national primary energy needs—is facing a prolonged decline due to persistent payment defaults. Gas production, it noted, has fallen sharply from its historical peak of 4 Bcf per day, while receivables have accumulated over the past decade, forcing several E&P companies to exit Pakistan.
PPEPCA expressed concern that despite four consecutive consumer gas price increases notified between November 2023 and January 2025, and a further adjustment in July 2025, no material improvement has been seen in the receivable position during FY2024–25. This, the association said, highlights the need for urgent structural and financial measures to address liquidity constraints of gas utilities and revive upstream activity.
As of September 30, 2025, total invoiced receivables stood at Rs 1.547 trillion (excluding late payment surcharge). Outstanding amounts from SSGCL were Rs 826.19 billion (Rs 730.49 billion and USD 339.37 million), while SNGPL owed Rs 720.97 billion (Rs 718.91 billion and USD 7.28 million). PPEPCA noted that these figures do not represent total upstream receivables, as data from some companies was not available.
The association further pointed out that under Petroleum Concession and Gas Sale Agreements, payments are due within 30 days of invoicing; however, Rs 991 billion, or 64 percent of the outstanding amount, has remained overdue for more than one year.
“The continued default by Sui companies has triggered a severe cash flow crisis for upstream E&P firms, forcing curtailment of exploration and development activities and accelerating the decline in indigenous gas supplies,” PPEPCA Chairman Ibrar Khan warned, adding that the situation poses serious risks to energy security and investor confidence.
