Gas deregulation plan heads to PM
The government is weighing a phased deregulation of the gas sector, with a proposed restructuring roadmap to be presented to the prime minister after a high-level review chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, according to a statement issued by the Ministry of Finance on Monday.
The framework aims to establish a financially sustainable, efficient and competitive gas market that supports businesses, encourages private investment and protects consumer welfare, the ministry said. It sets out a phased transition towards greater competition supported by effective regulation, improved operational performance and a more sustainable approach to pricing and supply. Participants reviewed sectoral challenges including circular debt, cross-subsidies, unaccounted-for-gas (UFG) losses and supply-demand imbalances. Discussions focused on addressing legacy liabilities and improving the financial viability of gas utilities, and on ensuring existing pressures do not undermine the proposed market structure or burden consumers.
A sustainable resolution of legacy circular debt and an approach to cross-subsidies were identified as important to the viability of restructured entities. The ministry said resolving these liabilities is central to the transition to a competitive gas market, and that legacy liabilities have weighed on the sector's finances and the government's fiscal position.
The meeting reviewed expected outcomes including enhanced energy security, increased private-sector investment, reduced fiscal and sovereign risks, greater business-to-business transactions, more stable gas pricing, improved access to competitively priced gas for exporters, and lower system losses through efficiency benchmarks and performance-based incentives.
The finance minister stressed aligning all stakeholders around a practical and implementable reform architecture. The framework draws on international experience, including gas-sector reforms in Türkiye and the United Kingdom, while accounting for Pakistan's institutional structure, market conditions and consumer interests.
Participants stressed careful sequencing to safeguard security of supply, protect regulated consumers and create a predictable environment for private-sector participation. Officials were told the design must keep supply secure throughout the transition.
The framework will be presented to the prime minister, following which further technical work and stakeholder consultations will refine the reform approach and support an orderly transition, the ministry said. The meeting reaffirmed the government's commitment to advancing reforms in a phased and consultative manner to strengthen financial sustainability, improve operational efficiency, attract investment and develop a more competitive gas market.