Pakistan’s gas sector is facing a massive circular debt of Rs3.283 trillion, lawmakers were informed during a meeting of the National Assembly’s Standing Committee on Petroleum. Members of the committee warned that if urgent reforms are not introduced, the growing financial pressure could seriously damage the system and increase the burden on consumers.
Director General Gas Abdul Rasheed Jokhio told the committee that circular debt in the gas sector has reached Rs3.283 trillion, highlighting deep financial problems across the supply chain. Lawmakers expressed concern that continuous losses and inefficiencies could destabilise state-run gas companies.
Managing Director of Sui Northern Gas Pipelines Limited, Amir Tufail, said the company has managed to reduce theft and leakage losses to 5.27 percent by FY25, which is below the target set by the Oil and Gas Regulatory Authority. In FY24, these losses, known as unaccounted for gas, stood at 4.93 percent. He added that SNGPL’s annual financial losses are around Rs30 billion, while unaccounted for gas amounts to nearly 30 billion cubic feet per year.
An official from Sui Southern Gas Company told the panel that its losses have decreased from 17 percent to 10 percent, which equals around 29 billion cubic feet annually. Balochistan was identified as a major contributor to these leakages.
Despite some improvements, lawmakers pointed out that the combined annual losses of SNGPL and SSGC, estimated at Rs60 billion, remain significant and are eventually passed on to consumers through higher tariffs.
Committee member Gul Asghar Khan suggested privatising the two gas utilities, arguing that running such companies is not the government’s primary responsibility. Naveed Qamar warned that if circular debt continues to rise without meaningful reforms, it could eventually destroy the companies.
Committee Chairman Syed Mustafa Mehmood said that if privatisation is considered, it must be done carefully to avoid creating monopolies. He stressed the importance of ensuring competition and protecting consumer interests.
In a separate briefing, the Petroleum Division requested Rs4.72 billion in development funds for the next fiscal year. The proposed projects include an explosives tracking system, geological surveys, and initiatives under the Hydrocarbon Development Institute of Pakistan.
Officials from the Geological Survey of Pakistan also informed the committee that lithium reserves have been identified in Gilgit Baltistan and Kotli. The discovery could open new opportunities for mineral exploration, even as the gas sector continues to struggle with rising financial challenges.
