6 days ago
- Business
- Business Recorder
Panels formed to address issues facing gas sector
ISLAMABAD: The government has established four specialised panels to address key issues in the gas sector, including circular debt, LNG tariffs, unaccounted-for gas (UFG) losses, and the increasing share of LNG in the national gas system, official sources told Business Recorder.
According to sources, a Committee on Implementing Structural Reforms in the Petroleum Sector— formed by the Prime Minister and chaired by the Minister for Petroleum and Natural Resources— has convened multiple meetings to deliberate on these matters.
The composition of the Committee is as following: Minister for Petroleum (Convener), Advisor to Prime Minister on Privatisation, National Coordinator on Energy Reforms, Lt General Muhammad Zafar Iqbal (retd) Secretary, Power Division, Secretary, Petroleum Division, Secretary, Cabinet Division/ representative and Chairman, OGRA.
Pakistan faces LNG glut: minister
The Minister for Petroleum emphasised that while the foundational work for the committee's assignment had been done through its Integrated Energy Study (Woodmac) conducted by the Petroleum Division, the present focus is to chalk out an implementation plan. He highlighted the importance of aligning the Committee's recommendations with the preparation of the Annual Delivery Plan (ADP) to be settled with LNG suppliers.
The representative of Power Division commented that challenges need to be addressed and disruptions need to be looked into. The Chair responded that the tactical issues would be discussed later and, presently, the focus needs to be on sustainability of the gas sector and how LNG over supply/ less off-take is affecting it.
The Secretary Petroleum framed the key issues to be addressed by the Committee, namely: rationalisation of gas tariffs (for both indigenous and imported gas), synchronisation of LNG demand with the power sector along with resolution of circular debt within the gas sector.
He noted that most of the required data and foundational analysis is already available through the Woodmac study and will serve as the basis for the committee's deliberations. The Chair commented that Committee should focus on implementation as a Plan. The Committee needs to focus on 2026 ADP's preparation and to devised policy of Integrated Energy strategy for Pakistan.
The Committee constituted a sub-committee comprising Secretary Power (Lead), DG Gas, MD SNGPL and a nominee from the Task Force. The chair can co-opt any member if he/she deems it necessary to effectively carry out the work and decided to constitute the following (ToRs) for the four sub-committees:
Subcommittee 1: work out a comprehensive proposal to synchronise LNG demand of the power sector in a manner that ensures timely and adequate supply without causing abrupt fluctuations in demand. GCEP submission to Woodmac to be considered; and identify causes and propose solutions to avoid sudden changes in LNG requirements by the power sector that lead to diversion of LNG cargo to other sectors.
Net Proceeds Differential (NDP) claims, if any, arising due to reduced off-take by Power Division to be considered. Sub-Committee -2 comprising Muhammad Ali (Lead), a nominee of KPMG, Islamabad and any co-opted member to formulate proposals to deal with circular debt stock in the gas sector.
Sub-Committee 3 is on LNG tariff rationalisation. Its scope will formulate proposals for LNG tariff rationalisation by revisiting all compositions of tariff (terminal charges, importer margins and LNG service agreement charges etc.) RLNG demand maximization options to be proposed (especially in domestic sector).
Sub-Committee 4- domestic gas tariff efficiency and transparency will address efficiency and transparency in tariff for domestic gas tariff including revenue requirements of the gas utilities, actual UFG losses taking into account growing LNG share in gas system, etc. Sui Companies Return on Assets formula revision to be considered to bring better efficiencies.
Copyright Business Recorder, 2025
