Petroleum Minister Ali Pervaiz Malik announces gas prices to remain unchanged this year, however, if circular debt were still increasing, raising gas prices would have been unavoidable.
Petroleum Minister Ali Pervaiz Malik briefed the National Assembly Standing Committee on Petroleum on Tuesday.
The minister informed the committee that the flow of circular debt in the gas sector is currently zero, although the total accumulated gas circular debt has reached nearly Rs3 trillion, of which Rs1.7 trillion consists of interest payments alone.
Ali Pervaiz Malik said that LNG cargo prices in the global market had risen to as high as $30, but Qatar continued supplying LNG to Pakistan under the existing agreement, a gesture Pakistan greatly values.
He clarified that if circular debt were still increasing, raising gas prices would have been unavoidable. However, he announced that gas prices would not be increased this year and existing rates would be maintained.
Highlighting fluctuations in gas demand from the power sector, the minister said the sector demands around 800 MMCFD of gas in the morning, which drops to 400 MMCFD by noon. He added that the power sector demanded 200 MMCFD of gas in January and is now seeking 500 MMCFD.
The meeting was also informed that Turkish Petroleum will carry out offshore drilling in the Indus Basin, with Pakistani companies participating as joint venture partners and providing investment under the project.
Sui Southern officials told the committee that gas demand in Balochistan doubles during winter. While summer demand stands at 70 MMCFD, it rises to 155 MMCFD in winter.
They said the gas sector in Balochistan suffers annual losses of Rs12 billion. The decline in production from the Jhal Magsi well has also contributed to gas shortages, while the installation of compressor pumps has reduced gas pressure. Officials added that gas losses at Sui Southern have been reduced by 60 percent, with efforts underway to bring losses down to single-digit levels.
Speaking to the media after the meeting, Petroleum Minister Ali Pervaiz Malik announced that, on the instructions of Prime Minister Shehbaz Sharif, there will be no increase in gas prices for the next six months. He said the growth of circular debt in the gas sector has been halted and no new debt is being generated.
