Islamabad: The Sui Southern Gas Company (SSGC) has indicated that raising domestic gas tariffs may be essential to guarantee a continuous and reliable gas supply, thereby mitigating the current load-shedding issues plaguing the country.
This proposal was discussed during a session of the Senate Standing Committee on Petroleum, which focused on addressing the persistent challenges of low gas pressure and frequent outages.
The Managing Director of Sui Northern Gas Pipelines Limited (SNGPL) informed the committee that domestic gas production now meets only 45% of the national demand, with the remaining 55% supplemented through imported Liquefied Natural Gas (LNG).
This heavy reliance on imports has strained the financial sustainability of the gas sector, leading to a significant circular debt.
Despite recent tariff adjustments, the circular debt remains substantial, with officials noting that the increase in tariffs has merely stabilized the debt at its current level without reducing it.
During Ramadan alone, over 25,000 consumer complaints were lodged concerning gas supply issues. The SNGPL has addressed more than 131,000 of these complaints over the past year, reflecting ongoing efforts to improve service reliability.
Petroleum Minister Ali Pervaiz Malik acknowledged the sector’s challenges, attributing them to years of underinvestment and policy delays.
He emphasized the need for comprehensive reforms to address the depletion of indigenous gas reserves, which are declining at an annual rate of over 10%, and to manage the increasing demand for gas across various sectors.
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The committee also discussed the Reko Diq mining project, highlighting its potential to generate substantial revenue and contribute to economic growth.
Production is expected to commence by 2028, with an estimated cash flow of $70 billion over its projected 37-year lifespan.
In conclusion, while the proposed tariff increase is seen as a necessary step to ensure a stable gas supply.
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It also underscores the urgent need for structural reforms and strategic investments in Pakistan’s energy sector to achieve long-term sustainability and meet the growing energy demands of the nation.
