ISLAMABAD: Pakistan’s gas sector is facing a financial crisis, with circular debt swelling to Rs3.283 trillion, lawmakers were informed during a briefing before the National Assembly’s Standing Committee on Petroleum. Parliamentarians warned that rising losses at state-run utilities could destabilise the system and ultimately burden consumers.
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Director General Gas Abdul Rasheed Jokhio highlighted that the sector’s mounting circular debt reflects deep-rooted financial stress across the gas supply chain. Lawmakers called for urgent structural reforms, including potential privatisation, of the country’s two main distribution companies.
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Sui Northern Gas Pipelines Limited (SNGPL) Managing Director Amir Tufail reported that theft and leakage losses, also known as unaccounted-for gas (UFG), were reduced to 5.27% in FY25, slightly above FY24’s 4.93%. Despite this improvement, annual financial losses at SNGPL remain around Rs30 billion, with UFG totalling roughly 30 billion cubic feet per year.
Sui Southern Gas Company (SSGC) has cut its losses from 17% to 10%, equating to about 29 billion cubic feet per year, with Balochistan accounting for the majority of the leakages. Combined, the two utilities incur approximately Rs60 billion in annual losses, costs ultimately passed on to consumers.
Committee members urged reform. Gul Asghar Khan suggested privatisation, arguing that running gas companies is not a core government function, while Naveed Qamar warned that unchecked circular debt could “destroy” the sector. Chair Syed Mustafa Mehmood stressed that any privatisation must avoid monopolies, ensuring competition and consumer safeguards.
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In a separate briefing, the Petroleum Division requested Rs4.72 billion in development funding for projects including an explosives tracking system, geological surveys, and initiatives by the Hydrocarbon Development Institute of Pakistan. Officials also highlighted the discovery of lithium reserves in Gilgit-Baltistan and Kotli, offering potential for new mineral exploration even as the gas sector grapples with growing financial strain.