The World Bank has urged Pakistan to prepare a clear roadmap for gas-sector reforms, with a strong focus on unbundling public gas utilities to improve efficiency, reduce losses, and contain circular debt.
The bank has called on the government to separate the distribution and transmission functions of gas utilities and create additional companies by splitting the existing structure. Officials believe these steps will strengthen governance and improve operational performance across the sector.
Currently, two state-owned entities, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC), supply gas nationwide. Their vast networks have struggled to control losses, which have contributed to a surge in circular debt, now at around Rs2.6 trillion.
The proposed reforms aim to reverse this trend. Policymakers view the gas-sector overhaul as critical, especially after years of financial stress in the power sector, where circular debt also hovered around Rs2.6 trillion and disrupted the entire energy chain.
Federal Minister for Petroleum, Mr. Ali Pervaiz Malik, held a meeting today with the World Bank Country Director for Pakistan, Ms. Bolormaa Amgaabazar, to discuss ongoing and future reforms in Pakistan’s energy sector, with a particular focus on gas sector sustainability. pic.twitter.com/Q6QViQJh1s
— Petroleum Division, Ministry of Energy (@Official_PetDiv) December 18, 2025World Bank Country Director for Pakistan Bolormaa Amgaabazar raised the issue during a meeting with Petroleum Minister Ali Pervaiz Malik on Thursday. She noted that the World Bank is already working closely with the ministry to develop a comprehensive reform roadmap. The plan includes measures to enhance efficiency, improve performance, and unbundle the Sui companies.
The government also plans to restructure gas utilities by revising the pricing formula, which currently relies on a guaranteed asset-based return. Authorities intend to implement quarterly price adjustments to more accurately reflect costs.
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Although unbundling has remained on the government’s agenda for more than a decade, successive administrations have failed to implement it. Initial efforts began in 2010 but stalled due to policy inconsistencies and frequent political changes.
To move the process forward, the government assigned the Oil and Gas Regulatory Authority (Ogra) to review and amend the gas pricing framework. Ogra has hired a consultant for this purpose, with the final report expected by the end of December.
