Gas Sector Debt Hits Rs3.28 Trillion, Lawmakers Warn

Pakistan’s Gas sector circular debt has climbed to Rs. 3.28 trillion, sparking fears of a potential systemic collapse. The alarming figure was revealed during a meeting of the National Assembly Standing Committee on Petroleum, where lawmakers expressed serious concern over the worsening situation.

Officials described growing financial stress across the entire gas supply chain, warning that without urgent energy reforms, the crisis could deepen further.

Why Is the Debt Rising?

According to officials, the surge in debt is linked to several structural problems:

• Persistent pricing gaps
• Operational inefficiencies
• High levels of unaccounted for gas (UFG)
• System-wide losses in public sector utilities

These issues have gradually fueled the broader circular debt crisis, placing pressure on the national economy.

Performance of Major Gas Companies

SNGPL Update

The Managing Director of Sui Northern Gas Pipelines Limited (SNGPL) reported improvements in reducing gas theft and leakages.

• UFG reduced to 5.27 percent in FY2025
• Annual financial losses remain around Rs. 30 billion
• Gas losses estimated at 30 billion cubic feet per year

SSGC Update

Similarly, Sui Southern Gas Company (SSGC) reported progress:

• Losses reduced from 17 percent to 10 percent
• Around 29 billion cubic feet lost annually
• Significant losses originate from Balochistan

Despite improvements, combined annual losses of both companies are estimated at nearly Rs. 60 billion annually.

Impact on Consumers

Officials acknowledged that these losses are eventually passed on to consumers through higher tariffs and tariff adjustments. Lawmakers warned that continued inefficiencies will further burden households and businesses already facing rising energy costs.

Calls for Structural Reforms

During the committee meeting, several members called for immediate structural reforms. One proposal under discussion is the privatization of state owned gas utilities.

However, concerns were raised about:

• Preventing monopolies
• Ensuring fair competition
• Protecting consumer interests

The debate highlights the complexity of reforming Pakistan’s struggling gas sector.

Development Funding and New Opportunities

Separately, the Petroleum Division has requested Rs. 4.72 billion in development funding for upcoming initiatives, including:

• Advanced geological surveys
• Modern tracking systems

Officials also revealed the discovery of lithium reserves in Gilgit Baltistan and Kotli, offering potential growth in the mining sector and diversification of energy resources.

Conclusion

With Gas sector circular debt crossing Rs. 3.28 trillion, the warning of systemic collapse has added urgency to reform efforts. While companies like SNGPL and SSGC report improvements, heavy losses and structural flaws continue to strain the system.

Lawmakers now face a critical decision: implement bold reforms or risk further financial instability in Pakistan’s energy sector.