Gas circular debt hits Rs3 trillion in Pakistan
Pakistan’s Gas circular debt hits Rs3 trillion in Pakistan has quietly turned into a major fiscal crisis, with circular debt including late payment surcharges. Instead of addressing the deep-rooted structural problems behind the crisis the state is now considering passing the burden onto citizens through higher taxes.
The issue was highlighted at a recent meeting of the National Assembly’s Standing Committee on Petroleum where Petroleum Minister Ali Pervaiz Malik confirmed the alarming scale of the gas sector’s circular debt.
Gas Tariffs Frozen Despite OGRA Recommendation
The minister told the committee that on the prime minister’s instruction gas tariffs would not be increased from January 1 even though the Oil and Gas Regulatory Authority (OGRA) had recommended up to a 7% hike.
OGRA had proposed the increase to meet nearly Rs886 billion in revenue requirements for FY26. While the decision may offer short-term political relief, it has pushed the government toward another controversial option.
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Higher Petroleum Levy Under Consideration
Instead of raising gas tariffs the government is considering increasing the petroleum development levy (PDL) by around Rupees 5 per litre on petrol and diesel. This approach has drawn criticism because the PDL is already extremely high, standing at Rs82 per litre. The move exposes clear policy contradictions protecting gas consumers while shifting the burden onto fuel users nationwide.
Unequal Burden on the Public
Pakistan has roughly 10 million gas consumers. Petrol and diesel, however, are used by almost the entire population, either directly or indirectly. Using a higher PDL to cover gas-sector losses means spreading the cost of inefficiency across the whole country including millions who have no connection to the gas network at all. This effectively forces the wider public to subsidize a sector plagued by internal failures.
Known Causes, Little Reform
The sources of the gas sector’s losses are well documented:
- Unaccounted-for gas
- Theft and leakage
- Weak governance
- Collusion within the system
Despite this, citizens continue to be asked to shoulder the burden through taxes rather than reforms.
Conclusion
Gas circular debt hits Rs3 trillion in Pakistan energy crisis can no longer be treated as a background issue. Freezing gas prices while raising fuel levies may offer temporary relief but it deepens economic injustice and avoids real solutions. If the government is serious about fixing the gas sector it must resist raising taxes and levies and instead confront the structural failures that continue to drain public finances.
FAQ’s
What is Pakistan’s current gas circular debt?
Gas circular debt hits Rs3 trillion in Pakistan including late payment surcharges.
Did the government approve a gas price increase?
Despite OGRA recommending up to a 7% hike gas tariffs will not be raised from January 1.