ISLAMABAD – A recent report has revealed that Pakistan’s LNG market locked in state monopoly as Rs2.86 Trillion circular debt exposed. The gas sector is burdened by huge debts, and the state remains the only major player in LNG supply.
Government data shows that circular debt in the gas sector reached about Rs2.86 Trillion. This includes unpaid dues among companies that import and distribute Liquefied Natural Gas (LNG). Regulatory gaps and pricing distortions are major drivers of the debt.
Because Pakistan’s LNG market locked in state monopoly as Rs2.86 Trillion circular debt exposed, private sector players are marginalised. State-owned entities like Sui Northern and Sui Southern Gas companies dominate imports, distribution, and pricing control.
RLNG (re-gasified LNG) imports under long-term contracts have created obligations even when supply use is low. Take-or-pay clauses force importers to pay for cargoes whether fully used or not. This adds to the debt load.
Domestic gas producers also suffer. Payments are delayed or diverted because imported LNG is prioritized over domestic supply. This discourages investment in local gas fields.
Authorities have proposed reforms. They plan to revise tariffs, improve transparency, and allow more competition. But critics warn that until Pakistan’s LNG market locked in state monopoly as Rs2.86 Trillion circular debt exposed is broken up, reforms will lag.
One measure under discussion is diverting some LNG cargoes meant for domestic use to international markets to raise revenue. Another is reducing reliance on imported gas by boosting domestic production. Government is also examining how to reduce losses from transmission and distribution.
The Petroleum Division has tasked experts to work with international auditors to chart a way out of this crisis. The goal is to reduce the circular debt stock and prevent new build-ups.
In summary, Pakistan’s LNG market locked in state monopoly as Rs2.86 Trillion circular debt exposed underscores a crisis in the gas sector. Without structural changes, state control and unsustainable financial burdens will continue to hamper energy stability and economic health.
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