Govt eyes gas sector overhaul to curb circular debt, attract investment

Mettis Global reported that the federal government has reviewed a plan to restructure and loosen controls in the gas sector, with the goal of tackling circular debt, cutting system losses and drawing private capital. The review was chaired by Finance and Revenue Minister Muhammad Aurangzeb, who wants a financially sound and competitive market that still protects consumers. The roadmap points to a slow move toward more competition under a workable regulatory framework.

Participants went over long-standing problems such as circular debt, cross-subsidies, losses from unaccounted-for gas and mismatches between gas supply and demand. They stressed clearing accumulated liabilities and setting a clear method for resolving cross-subsidies so that restructured gas entities remain financially viable. Measures to stop current financial strains from disrupting the market or burdening consumers were also discussed.

The framework is set to go to the Prime Minister, with further technical work and stakeholder consultations to follow in an orderly, phased process. The agenda is projected to strengthen energy security, draw private money and widen business-to-business gas trade. The meeting was attended by petroleum and finance officials, gas utility representatives and a World Bank team.