Local gas cuts cause $194m loss to economy in 4 months

ISLAMABAD: The country has braved a loss of $194 million (Rs53.374 billion) in the last four months just because of curtailment of the local gas by 329 mmcfd, showing the per month adverse impact of $48 million (Rs13.344 billion) on the economy.

The value of the local gas, if put on a par with the RLNG cost, stands at $500 million (Rs139 billion).

More importantly, the impact of crude oil production halted due to gas curtailment has been worked out at Rs5 billion with the loss of Rs20 billion faced by the national exchequer due to non-recovery of taxes as the offtake of 329mmcfd local gas is no more there.

This alarming disclosure was revealed in the latest data available with The News which shows how the authorities closed the local oil and gas wells to justify the import of spot LNG cargo.

However, sanity prevailed, as the ministerial meeting headed by Deputy Prime Minister Ishaq Dar held on December 16, 2024 decided not to purchase the spot LNG cargo for January.

The members of the National Assembly also raised the issue saying the government instead of using the local cheaper gas in the system was making its mind to import LNG at $15 per MMBTU.

Meanwhile, top sources told this reporter that the local and international exploration and production companies had expressed their mounting frustration over significant gas curtailments.

Leading energy companies, they disclosed, including MOL Group, OGDCL, and Pakistan Petroleum Limited (PPL), have all reported substantial losses due to forced gas curtailments.

MOL Group is facing production curtailments of 110 MMCFD in the Tal Block. It has reported risks of permanent reservoir damage and severe productivity deterioration due to liquid loading. The OGDCL, over the past eight weeks alone, has suffered a revenue loss of approximately $8 million, with curtailed production of 1,461 MMCFD of gas, 26,394 barrels of oil, and 1,391 MT of LPG. “And the Pakistan Petroleum Limited (PPL) has also highlighted the adverse impact of curtailed production on field development plans and operational longevity. Persistent curtailments, combined with the lack of a clear resolution, have created a toxic environment for investment, with the stakeholders losing faith in the sector’s governance.”

“Pakistan’s energy crisis is not just a technical issue; it is a reflection of systemic mismanagement and misplaced priorities. Without swift and decisive action, the consequences will be dire — not just for the energy sector, but for the country’s economy and its people.”

The authorities in Petroleum Division said that they had curtailed the local gas outflow to manage gas pressure in the national transmission network mainly because of the offtake of RLNG by the power sector, but they failed to respond when their attention was drawn towards the loss of $194 million the country’s economy has sustained mainly because of the local gas curtailment by almost 50 percent in the last 4 months. However, the authorities say that in the wake of lower GDP growth and high gas tariffs, gas consumption has been reduced by 150 mmcf per month. The Petroleum Division also says that it cannot curtail the import of LNG from Qatar and ENI under long-term agreements in order to manage the line pack pressure, However, the Power Division has managed to shift 5 LNG cargos which were due to arrive in 2025 to 2026. However, the latest data on gas curtailment available with The News reveals that the local gas has been reduced by 50 mmcfd from Sui (SML), 25 mmcfd from Qadirpur, 70 mmcfd from Mari (Ghazij + HRL); 30 mmcfd from Mari-GTH, 45mmcfd from Nashpa: 15 mmcfd from Togh, 10mmcfd from Dhok Hussain, 4mmcfd from Tolanj and 80 mmcfd from MOL.