Why govt can't offer cheaper gas? Minister explains

Petroleum Minister Musadik Malik says 66% of gas users face no tariff hike as tiered rates aim to curb circular debt

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Petroleum Minister Musadik Malik clarified that 66% of gas consumers remain unaffected by tariff increases due to a tiered pricing system, adding that indiscriminately lowering gas prices would exacerbate the country’s circular debt.

Speaking at a parliamentary committee meeting chaired by Syed Mustafa Mehmood, Malik highlighted the necessity of balanced tariffs. “If we sell gas cheaply, the circular debt increases,” he noted, stressing that targeted subsidies help manage losses while protecting low-income groups.

Malik also touched upon the management of state-owned petroleum companies, noting that three firms have been transferred to a sovereign wealth fund. This move sparked questions from committee members, particularly Naveed Qamar, who inquired whether the finance ministry intended to dissolve the fund. Malik denied any such plans, affirming that there’s been no indication from the government to do so.

Discussing investments in the gemstone sector, the minister revealed ongoing work to promote the industry, with a focus on technology transfer and skilled workforce development. He mentioned that a policy covering Gilgit-Baltistan (G-B) and Azad Jammu and Kashmir (AJK) is in progress, with the aim to curb smuggling and enhance value addition.

On gas supply, Malik acknowledged significant challenges, especially in Balochistan, where theft and outdated infrastructure remain persistent issues. He outlined steps being taken to replace ageing pipelines and clamp down on theft-prone areas, noting that the government had “locked down” the top five regions notorious for gas pilferage.

In response to a question about gas distribution, Malik emphasised that tiered tariffs allow for equitable pricing across various income levels. He reiterated that despite the complexities, 66% of consumers bear no additional tariff burden, allowing the government to control losses and avoid worsening the financial strain.