Petroleum committee warns SSGC deal to convert gas into LPG may reduce supply

Pakistan’s parliamentary committee on petroleum has raised concerns over an upcoming deal between Sui Southern Gas Company (SSGC) and Jamshoro Joint Venture Limited (JJVL), that will convert gas into liquefied petroleum gas (LPG) for private sale could further reduce supply for domestic consumers.

The National Assembly Standing Committee on Petroleum, chaired by Syed Mustafa Mahmud, was briefed on the country’s oil and gas reserves.

Officials disclosed that Pakistan lacks gas storage facilities, and discussions are underway to develop a storage plan. However, the committee recommended shelving the project, questioning its necessity.

During the session, committee member Shahid Khan inquired whether a survey had been conducted to assess Khyber Pakhtunkhwa’s natural reserves, given its abundant resources. The committee requested detailed findings in the next meeting.

Committee members expressed reservations about SSGC’s deal with JJVL, under which the company will convert gas into LPG for private market sale. SSGC officials admitted that the agreement would impact local gas availability.

"We are entering an agreement with JJVL, but it will affect local gas supply," SSGC representatives acknowledged. The committee sought a detailed report on the agreement in the next session.

The absence of the Minister of State for Petroleum drew criticism from committee members. "We understand that the secretary is out of the country, but the petroleum minister should have been present," they said.

The deregulation of petroleum prices was also discussed. Committee members noted that fuel dealers have concerns and recommended their inclusion in future discussions.

Petroleum ministry officials stated that discussions were ongoing regarding whether fuel prices should change daily or weekly.

They admitted that deregulation could negatively impact certain areas. "Currently, the government maintains price uniformity by covering Rs12 per litre in margins, but no final decision has been made," officials explained.

OGRA Chairman dismissed concerns over a nationwide fuel dealers’ strike, calling it a misunderstanding. "Dealers fear that oil companies may not offer them fair margins," he said. The committee summoned the OGRA chairman and fuel dealers for the next meeting to address deregulation concerns.