Energy ministry’s role being curbed

Separate authority to have regulatory powers


Zaigham Naqvi January 26, 2020
PHOTO: FILE

ISLAMABAD: As part of its plan to introduce reforms in the oil and gas sector, the government has decided to set up a Pakistan Petroleum Exploration and Production Authority to restrict the energy ministry’s role to policymaking.

According to documents available with The Express Tribune, the government has decided to separate policymaking and regulatory powers in the ministry. The new authority will be established by 2022 and have regulatory powers.

The energy ministry will only be handling policymaking.

Work on establishing the authority started after several foreign companies pulled out of Pakistan in the past few years in the wake of bureaucratic hurdles and policy issues.

The independent authority, when established, will provide a level playing field for the investors seeking to pour capital into the upstream petroleum sector.

The government has decided to revamp the gas sector and reduce its losses by 2021.

The Economic Coordination Committee (ECC) of the cabinet has already approved third party access to gas pipelines. This will allow private companies to use gas pipelines and provide better facilities to consumers.

The government also approved an unaccounted-for-gas (UFG) reduction plan for the public gas utilities that would be implemented over three years.

Under the plan, the reduction in UFG will push up revenues of the gas utilities by Rs29.12 billion by the end of financial year 2021-22.

Projections show Sui Southern Gas Company (SSGC) will be able to increase its revenue by around Rs20.1 billion and Sui Northern Gas Pipelines Limited (SNGPL) will jack up its revenue by Rs9.023 billion. The two companies have already started work on the plan in their respective jurisdictions by initiating efforts to control theft, ensure meter accuracy, conduct a survey for detecting underground and overhead leakages, undertake repair and implement other strategies to push down the UFG level.

As part of the plan, SSGC will reduce its UFG level by 9.55 percentage points (or 40,629 million cubic feet of gas per day – mmcfd), which in financial terms equals to Rs20.1 billion.

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