Gas Sector Debt Crosses an Alarming Rs. 3.28 Trillion, Lawmakers Warn of Systemic Collapse

Pakistan’s gas sector circular debt has surged to Rs. 3.283 trillion, raising serious concerns among lawmakers who warned that the system could collapse without urgent reforms.

The alarming figure was disclosed during a meeting of the National Assembly Standing Committee on Petroleum, where officials highlighted growing financial stress across the gas supply chain.

Lawmakers cautioned that continued losses and inefficiencies could further burden consumers. Officials said the debt has accumulated due to systemic issues, including losses, inefficiencies, and pricing gaps in the sector.

Calls were made for structural reforms, including possible privatization of state owned gas utilities. The Managing Director of Sui Northern Gas Pipelines Limited said the company has reduced theft and leakages, known as unaccounted for gas, to 5.27 percent in FY2025.

However, annual financial losses still stand at around Rs. 30 billion, with gas losses estimated at 30 billion cubic feet per year.

Similarly, Sui Southern Gas Company reported a reduction in losses from 17 percent to 10 percent, equivalent to around 29 billion cubic feet annually. Officials noted that a significant portion of these losses originates from Balochistan.

Despite improvements, combined losses of both utilities are estimated at around Rs. 60 billion annually, which are ultimately passed on to consumers through higher tariffs.

Lawmakers stressed the need for urgent reforms, with some suggesting privatization as a solution. However, concerns were also raised about ensuring competition and avoiding monopolies in the case of privatization.

Separately, the Petroleum Division has sought Rs. 4.72 billion in development funding for upcoming projects, including geological surveys and tracking systems.

Officials also informed the committee that lithium reserves have been identified in Gilgit Baltistan and Kotli, offering potential new opportunities in the mining sector.