Minister orders Ogra to review gas firms' revenue needs
The circular debt in the petroleum sector has reached approximately Rs 2.8 trillion. The government, under Prime Minister Shehbaz Sharif is working to resolve this issue in consultation with the International Monetary Fund (IMF). An initial plan has been drafted to mitigate the gas circular debt without placing an additional burden on consumers.
To tackle core challenges in the gas sector — including circular debt, LNG tariffs, unaccounted-for gas (UFG) losses, and the rising share of LNG in the national gas mix—the government has established four specialized panels.
Consumers lack protection: Ogra failing to act against gas companies: PAC report
The petroleum minister, who also chairs the main committee, is overseeing the sub-committees tasked with preparing final recommendations for the highest level of government.
In a recent meeting, a senior Joint Secretary from the Cabinet Division read out the composition and Terms of Reference (ToRs) of the four sub-committees.
Dr Fakhray Alam Irfan, Secretary of the Power Division and head of the sub-committee on LNG demand synchronization, reported that he chaired a meeting on July 21, 2025. The meeting included representatives from PSO, SNGPL, and CPPA. The Power Division presented a report on the forecasting and management of RLNG demand in the power sector.
Dr Irfan pointed out that one of the main issues discussed was the parking of NPD (Net Present Deficit) claims under LNG contracts due to reduced power offtake and the must-run status of RLNG-based power plants. He acknowledged that while the power sector has mostly consumed gas according to firm demand, occasional shortfalls in RLNG lifting occur due to fluctuating power demand caused by weather, generation mix, and system constraints.
He added that the pipeline storage limitations raised by the Petroleum Division are valid. To address this, he stressed the need for accurate demand forecasting and improved coordination between NPCC and SNGPL, except in unforeseen circumstances. He also recommended that the Finance Division be consulted on the NPD issue.
It was noted that the sub-committee on circular debt mitigation has not yet convened. However, the Additional Secretary (Policy) provided an update on the sub-committee for LNG tariff rationalisation, which met on July 19, 2025. Representatives from all companies across the LNG/RLNG supply chain participated.
The meeting covered detailed discussions on various RLNG pricing components. Suggestions were made for reducing or revisiting charges such as terminal fees by PQA, customs duty, FED, Sindh Cess, and company/importer margins. The sub-committee is currently reviewing these cost elements, and formal recommendations will follow.
Meanwhile, Ogra Chairman, Masroor Khan who leads the sub-committee on domestic gas tariff efficiency and transparency reported that their meeting on July 21, 2025, was attended by representatives from the Sui companies, KPMG, and the Petroleum Division. The focus was on enhancing operational efficiency and reducing UFG. He noted that the companies are making progress in lowering UFG levels in accordance with benchmarks set by the Ogra.
He also provided an update on efforts to review the Return on Asset (ROA) formula for Sui companies. Although the Ogra has made several attempts to hire a consultant, the process has so far been unsuccessful. Recently, the Ogra issued an Expression of Interest (EoI) to potential consultancy firms, and the selection process is expected to conclude soon.
Minister Ali Pervaiz Malik emphasized the Ogra must complete its review of each component of the Sui companies' revenue requirements within the next few weeks.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
41 minutes ago
- Business Recorder
Higher interest rates causing adverse impact on economy: Tanveer
LAHORE: S M Tanveer, Patron-in-Chief of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has pointed out that interest rates in Pakistan have been consistently higher over the past decade than in countries with currencies pegged to the US dollar, such as Hong Kong and the UAE. This has created an unsustainable gap between our interest rates and those of stronger economies, putting pressure on the rupee and making everyday life more expensive for all of us. He has urged the government to take immediate action to stimulate economic growth and alleviate the suffering of the common man. According to him, while global interest rates have remained stable around 4-5%, Pakistan's policy rate has peaked above 22% and still stands at 11%, despite inflation falling to just 4%. This wide interest rate gap is having a devastating impact on our economy and our people. Tanveer said high interest rates are causing savings to lose value faster, prices of essentials to rise, businesses to struggle to survive, job opportunities to shrink, and exports to become uncompetitive. The government is also spending trillions just to pay interest on domestic debt, which is unsustainable. He has demanded a reduction of interest rates to 6% - immediately to lower inflation further, cut debt servicing by Rs 3.5 trillion, boost businesses and create jobs, stabilize the rupee, and promote real growth and exports. Copyright Business Recorder, 2025
Business Recorder
41 minutes ago
- Business Recorder
Spot rate loses further Rs200 per maund
LAHORE: The Spot Rate Committee of the Karachi Cotton Association on Tuesday decreased the spot rate by Rs 200 per maund and closed it at Rs 15,800 per maund. Cotton Analyst Naseem Usman told Business Recorder that the local cotton market remained bearish and the trading volume remained satisfactory. He also that the rate of new cotton in Sindh is in between Rs 15,5 00 to Rs 15,900 per maund and the rate of cotton in Punjab is in between Rs 15,500 to Rs 16,200 per maund. The rate of Phutti in Punjab is in between Rs 6,500 to Rs 7,000 per 40 kg and the rate of Phutti in Sindh is in between Rs 6,000 to Rs 6,700 per 40 kg. The rate of cotton in Balochistan is in between Rs 15,600 to Rs 15,800 per maund. The rate of Phutti in Balochistan is in between Rs 6,600 to Rs 6,800 per maund. Around, 9000 bales of Tando Adam were sold in between Rs 15,550 to Rs 15,800 per maund, 2400 bales of Shahdad Pur were sold in between Rs 15,600 to Rs 15,900 per maund, 1800 bales of Sanghar were sold in between Rs 15,550 to Rs 15,900 per maund, 1200 bales of Hyderabad were sold in between Rs 15,550 to Rs 15,850 per maund, 1800 bales of Mir Pur Khas were sold in between Rs 15,600 to Rs 15,800 per maund, 400 bales of Hala were sold at Rs 15,600 per maund, 200 bales of Patoki were sold at Rs 15,850 per maund, 1000 bales of Burewala were sold in between Rs 15.800 to Rs 15,900 per maund, 400 bales of Chichawatni were sold at Rs 15,900 per maund, 600 bales of Gojtra were sold at Rs 16,000 per maund, 200 bales of Muridwala were sold at Rs 16,100 per maund, 600 bales of Mongi Bangla were sold in between Rs 16,000 to Rs 16,100 per maund, 200 bales of Bahwalpur were sold at Rs 16,200 per maund, 600 bales of Fort Abbas were sold in between Rs 16,000 to Rs 16,200 per maund, 1000 bales of Khanewal were sold in between Rs 15,800 to Rs 16,200 per maund, 400 bales of Lodhran were sold in between Rs 16,000 to Rs 16,200 per maund, 600 bales of Shujabad were sold in between Rs 15,900 to Rs 16,200 per maund, 200 bales of Haroonabad were sold at Rs 15,950 per maund and 1200 bales of Winder were sold in between Rs 15,550 to Rs 15,900 per maund The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 200 per maund and closed it at Rs 15,800 per maund. Polyester Fiber was available at Rs 330 per kg. Copyright Business Recorder, 2025
Business Recorder
41 minutes ago
- Business Recorder
PCA uncovers fraudulent cases worth Rs60.5bn
KARACHI: The Post Clearance Audit (PCA) has achieved unprecedented success in combating tax evasion, detecting fraudulent cases worth Rs. 60.5 billion, and having recovered over Rs. 6.7 billion during the past two years. According to the official statistics, the PCA, previously considered a lesser-known component of customs' machinery, has been transformed into a leading enforcement arm through sophisticated data-driven operations and landmark actions across multiple sectors including revenue recovery, fraud detection, anti-money laundering, and policy reform under the leadership of Dr Zulfikar Ali Chaudhary, who served as Director General of PCA throughout this transformative period and now preparing for his tenure end on August 4, 2025, which has been marked by groundbreaking achievements, institutional strengthening, and the implementation of data-driven enforcement strategies. The most significant breakthrough came from the Directorate of PCA South, under Director Sheeraz Ahmed, which uncovered the largest money laundering cartel in Pakistan Customs history. The massive fraud network, linked to the solar panel import sector, involved Rs. 120 billion in illegal transactions. This high-profile detection has prompted major reforms within the customs department, successfully plugging revenue leakages and preventing further losses to the national economy through over-invoicing schemes and money laundering operations. The PCA South directorate alone detected duty and tax evasion cases worth Rs. 48 billion and recovered Rs. 2 billion in revenue—an unprecedented achievement in the unit's history. Similarly, the Directorate of PCA Central, headed by Director Azmat Tahira, contributed significantly to the overall success with detections worth Rs. 12.5 billion and recoveries of Rs. 4.7 billion in duties and taxes. Across all regional directorates—South, Central, and North—PCA teams identified widespread misuse of the Export Facilitation Scheme (EFS), successfully reclaiming billions in evaded duties and taxes. These investigations have also led to substantial policy reforms that have strengthened checks and balances within the system. The regulatory improvements implemented as a result of these investigations are now actively preventing revenue losses worth billions of rupees, creating a long-term positive impact on Pakistan's fiscal health. PCA has evolved from a relatively obscure department into a key enforcement arm of Pakistan Customs. The unit's success in detecting large-scale fiscal fraud, curbing money laundering activities, and reclaiming billions in evaded duties and taxes has established it as a crucial component of the country's revenue protection framework. The transformation represents a significant shift toward modern, technology-driven customs enforcement, setting new standards for revenue recovery and fraud detection in Pakistan's customs operations. Copyright Business Recorder, 2025
