CCP Releases Competition Analysis Report, Highlighting LNG Market Challenges

The Competition Commission of Pakistan (CCP) has released a comprehensive report titled “State of Competition in the LNG Sector in Pakistan.” The study reviews key structural, regulatory, and behavioral challenges that limit competition in the liquefied natural gas (LNG) market.

Commissioned by the Finance Division and prepared by CCP’s Research Department, the report evaluates how state-owned enterprises (SOEs) such as PSO, PLL, SSGCL, and SNGPL shape the LNG value chain and impact efficiency and market access.

Key Findings

• Monopolistic control: SOEs dominate imports, storage, and distribution, restricting new entrants.
• Regulatory barriers: Licensing and tariff policies favor incumbents, discouraging private investment.
• Access limitations: The delayed implementation of Third-Party Access (TPA) rules restricts infrastructure use.
• Rising circular debt: Sector debt hit PKR 2,866 billion in January 2024 due to delayed tariff revisions and RLNG diversion.

Recommended Reforms

• One-Stop-Shop System: Establish a Central Coordination Committee (CCC) for LNG Import Clearance.
• Fast-track TPA rules: Speed up access for LNG terminals and pipelines to attract private players.
• Unbundling reforms: Separate Sui companies’ transmission and distribution to level the playing field.
• Efficiency measures: Improve demand forecasting and cut Unaccounted-for-Gas (UFG) losses with targeted three-year plans.

Chairman’s Statement

CCP Chairman Dr. Kabir Ahmed Sidhu said the research aims to drive policy reforms that ensure open access and encourage private sector participation. He noted that greater competition would enhance efficiency, innovation, and energy security in Pakistan’s LNG sector.

Global Lessons

The report draws inspiration from international experiences, especially Japan, highlighting how gradual market liberalization and unbundled infrastructure ownership can strengthen transparency and competition.