Pakistan gas sector circular debt rises to Rs3.2 trillion level

Pakistan Gas Sector – (Web Desk) – Pakistan’s gas sector is under severe financial pressure, with circular debt soaring to Rs3.283 trillion, lawmakers were informed, according to a report by The News. Members of the National Assembly raised serious concerns, warning that continued losses at state-owned gas companies could weaken the entire system and place even more financial burden on consumers.

The issue came to light during a meeting of the National Assembly Standing Committee on Petroleum, where officials and lawmakers strongly criticised the current situation and urged major structural reforms, including possible privatisation of gas utilities. Director General Gas Abdul Rasheed Jokhio told the committee that the massive debt reflects long-standing financial and operational problems throughout the gas supply chain. Lawmakers stressed that without immediate corrective measures, the sector’s stability could be at risk.

Meanwhile, Managing Director Amir Tufail of Sui Northern Gas Pipelines Limited said the company had improved its performance by reducing gas theft and leakages to 5.27% by FY25, meeting targets set by the Oil and Gas Regulatory Authority. However, he added that the company still suffers annual financial losses of around Rs30 billion, with unaccounted-for gas reaching about 30 billion cubic feet each year.

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An official from Sui Southern Gas Company also shared progress, saying their losses had dropped from 17% to 10%, though this still equals nearly 29 billion cubic feet annually. Balochistan was identified as the main area contributing to these losses. Despite these improvements, lawmakers noted that combined yearly losses of both companies, estimated at Rs60 billion, are ultimately passed on to the public through higher gas costs.

Committee member Gul Asghar Khan suggested privatising the gas companies, arguing that running commercial utilities is not the government’s primary responsibility. Another member, Naveed Qamar, warned that if circular debt continues to grow unchecked, it could seriously damage the companies’ future.

Committee chairman Syed Mustafa Mehmood advised caution, saying privatisation should not lead to monopolies. He emphasised the importance of maintaining fair competition and protecting consumers’ interests while planning reforms.

In a separate briefing, the Petroleum Division sought Rs4.72 billion in development funding for the next fiscal year for projects, including an explosives tracking system, geological surveys and initiatives of the Hydrocarbon Development Institute of Pakistan.

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Officials from the Geological Survey of Pakistan also informed the committee that lithium reserves have been identified in Gilgit Baltistan and Kotli, opening potential new avenues for mineral exploration even as the gas sector grapples with mounting financial strain.