Consumers face high bills and a limited gas supply
ISLAMABAD: The Lahore-based Sui Northern Gas Pipelines Limited (SNGPL) continues unannounced gas rationing even during summer. The company faces internal disputes over pipeline capacity allocation to a third party. Amid these tensions, the government plans to impose a captive gas levy on power sector gas distribution. Officials claim the move will create a level playing field for public and private suppliers.
Pakistan currently suffers a gas and LNG supply glut. The government has already sought the postponement of over 170 LNG import cargoes. At the same time, SNGPL has forced local producers to shut down fields or scale back output. This policy has cut more than 300 million cubic feet per day of local gas production.
These decisions have caused substantial losses for state-owned OGDCL and other local producers. OGDCL, listed on the London Stock Exchange, warned that forced production cuts would reduce crude oil, gas, and LPG output. This situation erodes foreign exchange reserves and forces consumers to pay higher fixed charges for a minimal supply.
Consumers now receive gas for only two or three hours during meal times. At the same time, the government has doubled fixed monthly charges effective July 1, 2025. A household consuming gas worth Rs450 now faces a bill near Rs2,500.
OGDCL reported reduced sales revenue of Rs310.907 billion during the nine months ending March 2025, compared to Rs348.164 billion in the same period last year. The company blamed forced curtailments and lower crude prices.
Meanwhile, circular debt in the energy sector has surged beyond Rs4.6 trillion. To improve cash flows, the government permitted some producers to sell directly to third parties. Companies like MOL-Pakistan and Petroleum Exploration Limited secured such approvals. However, SNGPL opposed the Razgir field arrangement, arguing it created market distortions.
The company highlighted that a Rs791 per unit captive levy, imposed on industrial consumers under IMF conditions, does not apply to private suppliers. This difference encourages industries to shift toward cheaper private gas, intensifying the conflict between stakeholders.
