The Pakistan gas sector circular debt has surged to Rs3.283 trillion, lawmakers were informed during a briefing to the National Assembly’s Standing Committee on Petroleum.
Officials warned that mounting losses at state-run utilities could destabilise the system and increase the burden on consumers if urgent reforms are not implemented.
Director General of Gas, Abdul Rasheed Jokhio, told the committee that the debt reflects deep-rooted financial stress across the supply chain.
Pakistan Gas Sector Circular Debt and Utility Losses
The scale of circular debt in the Pakistan gas sector has intensified calls for structural reform, including the possible privatisation of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC).
SNGPL Managing Director Amir Tufail said theft and leakage losses were reduced to 5.27% by FY25, below targets set by the Oil and Gas Regulatory Authority (Ogra). In FY24, unaccounted for gas (UFG) stood at 4.93%.
Despite improvements, SNGPL’s annual financial losses remain around Rs30 billion, with UFG totalling roughly 30 billion cubic feet per year.
An SSGC official told the committee that losses declined from 17% to 10%, equivalent to about 29 billion cubic feet annually. Balochistan was identified as a major contributor to leakages.
However, lawmakers stressed that combined annual losses of approximately Rs60 billion from both companies are ultimately passed on to consumers.
Privatisation Debate and Reform Calls
Committee member Gul Asghar Khan advocated privatisation, arguing that running gas utilities is not a core government function.
Naveed Qamar cautioned that unchecked circular debt could “destroy” the companies if reforms are delayed. Meanwhile, Committee Chair Syed Mustafa Mehmood emphasised that any privatisation must prevent monopolies and ensure consumer protection.
The debate underscores broader concerns about governance, operational efficiency and financial sustainability in Pakistan’s energy sector.
