ISLAMABAD: Pakistan’s gas sector is sinking under a staggering Rs3.283 trillion circular debt, lawmakers were told, as parliamentarians warned that mounting losses at state-run utilities could ultimately collapse the system and further burden consumers, it was reported on Saturday.
The disclosure before the National Assembly’s Standing Committee on Petroleum triggered sharp criticism and calls for structural reform, including privatisation, of the country’s two gas distribution companies.
Director General Gas Abdul Rasheed Jokhio told the panel the sector’s circular debt has swelled to Rs3.283 trillion, underscoring deep-rooted financial stress across the supply chain. Lawmakers cautioned that without urgent intervention, rising debt and inefficiencies could destabilise the industry.
Managing Director of Sui Northern Gas Pipelines Limited (SNGPL), Amir Tufail, said the company had reduced theft and leakage losses down to 5.27% by FY25, below targets set by the Oil and Gas Regulatory Authority (Ogra).
Notably, in FY24, these losses, which are called unaccounted for gas (UFG), were 4.93%. He said annual financial losses at SNGPL stand at about Rs30 billion, while UFG totalled roughly 30 billion cubic feet (BCF) per year.
An official of the Sui Southern’s utility informed the panel that SSGC’s losses have been cut from 17% to 10%. This 10 per cent is around 29 BCF per year. Balochistan is the major contributor to these leakages.
Despite the improvements, lawmakers said the combined annual losses of Sui Northern and Sui Southern Gas Company, estimated at around Rs60 billion, are substantial and ultimately passed on to consumers.
Committee member Gul Asghar Khan called for privatising the two utilities, arguing that operating gas companies is not the government’s core function. Naveed Qamar warned that unchecked circular debt could “destroy” the companies if meaningful reforms are delayed.
Chairing the session, Syed Mustafa Mehmood cautioned that any privatisation must avoid creating monopolies, stressing the need for competition and consumer safeguards.
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.
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.
