Pakistan’s gas sector circular debt has surged to a record Rs. 3.28 trillion, raising fears of systemic collapse if urgent reforms are not implemented. The alarming figure emerged during a parliamentary briefing, where lawmakers warned that continued losses and inefficiencies in state-owned utilities could push the energy sector deeper into crisis and increase consumer tariffs.
Officials told the National Assembly Standing Committee on Petroleum that financial stress is mounting across the gas supply chain due to pricing gaps, transmission losses, and operational inefficiencies.
Combined annual losses of the two major utilities Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) are estimated at around Rs. 60 billion, costs that are ultimately passed on to consumers through higher gas tariffs.
SNGPL reported that unaccounted-for gas (theft and leakages) fell to 5.27% in FY2025, yet the company still faces about Rs. 30 billion in yearly losses, with gas losses near 30 billion cubic feet annually.
SSGC also reduced losses from 17% to 10%, equivalent to roughly 29 billion cubic feet per year, though officials noted that a significant share of losses originates from Balochistan.
Lawmakers stressed that without structural reforms including possible privatization of state-owned gas utilities the circular debt could continue rising.
A committee member warned:
“If inefficiencies and losses persist, the gas system risks collapse and consumers will bear an even heavier tariff burden.”
However, concerns were raised about ensuring competition and preventing monopolies if privatization proceeds.
Separately, the Petroleum Division has requested Rs. 4.72 billion for development initiatives such as geological surveys and tracking systems. Officials also revealed that lithium reserves have been identified in Gilgit-Baltistan and Kotli, potentially opening new opportunities in Pakistan’s mining sector.
With circular debt exceeding Rs. 3.28 trillion and annual utility losses continuing, Pakistan’s gas sector faces mounting financial pressure. Experts say decisive reforms, efficiency gains, and investment are critical to prevent further tariff hikes and stabilize the energy system.