Pakistani gas companies lose Rs40bn annually to theft

ISLAMABAD: Pakistani state-run gas companies suffer annual losses amounting to approximately Rs40 billion due to theft, officials of the Petroleum Division revealed during a parliamentary panel meeting on Thursday. The southern regions of the country bear the heaviest losses.

Director General of Gas, addressing concerns about losses in the Sui companies, reported that the Sui Southern Gas Company (SSGC) faces losses equivalent to 12 percent of its total supply, while the Sui Northern Gas Pipeline Limited (SNGPL) experiences losses of six percent. “In total, annual gas theft in Pakistan reaches Rs40 billion, with SSGC alone reporting losses exceeding Rs25 billion,” the DG Gas stated.

The gas sector is additionally burdened by a circular debt amounting to Rs2 trillion, the DG Gas informed the committee. “Selling LNG has become increasingly challenging,” he remarked. “The power sector must either absorb the entire LNG supply or devise alternative solutions.”

The National Assembly’s Standing Committee on Energy (Petroleum Division), chaired by Syed Mustafa Mehmood, received a comprehensive briefing from the Petroleum Division during the meeting. Petroleum Minister Musadik Malik emphasized the necessity to enhance local oil and gas exploration in Pakistan, noting a decline in the country’s production rates.

“LNG supply globally is on the rise,” Malik stated. “Qatar plans to increase LNG supply by 33 percent next year, and Australia is also boosting its LNG output.”

Concerns were raised during the committee meeting on the departure of major international oil and gas companies from Pakistan. Minister Malik attributed this trend to business environment preferences and security costs associated with exploration activities.

Director General of Petroleum Concessions (PC) Kashif Ali reported that the country has issued 149 licenses so far for oil and gas exploration, resulting in a total of 467 discoveries, including 96 oil and 371 gas discoveries. “The price of domestically produced gas ranges from $6 to $9 per cubic meter,” he disclosed.

Petroleum Secretary Momin Agha stated that Pakistan currently receives 4.2 billion cubic feet of gas daily, including LNG, with one billion cubic feet attributed to LNG alone.

The government’s recent testing of Russian crude oil has led to its introduction in the private sector, with strict adherence to a $60 per barrel cap to avoid American sanctions, Secretary Agha clarified.

Chairman of the committee highlighted concerns regarding local refineries not meeting Euro-V standards and causing environmental pollution and health risks due to metal content in petrol. The issue is being addressed in new refinery policies, the DG Oil said.