Latest news with #PetroleumDivision
Business Recorder
a day ago
- Business
- Business Recorder
Minister orders Ogra to review gas firms' revenue needs
ISLAMABAD: Minister for Petroleum Division, Ali Pervaiz Malik, has directed the Oil and Gas Regulatory Authority (Ogra) to review every component of the revenue requirements of the Sui gas companies. The aim is to reduce gas prices and address the growing circular debt issue, sources told Business Recorder. 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
Business Recorder
7 days ago
- Business
- Business Recorder
PD in a quandary over less RLNG off-take by power plants
ISLAMABAD: Petroleum Division is still in a quandary over less off-take of Regasified Liquefied Natural Gas (RLNG) by the power plants, which is resulting in rapid saturation of Sui Northern Gas Company Limited (SNGPL) system, well informed sources told Business Recorder. 'SNGPL is continuously reporting reduced RLNG consumption by the power sector against its committed demand of 600 MMCFD for July 2025,' said Deputy Director (Tech Gas) Salahuddin Khan. M/s SNGPL in a letter of July 15, 2025 has reiterated that consumption remained 327 MMFCD on July 16, 2025, with a monthly average of 501-MMFCD, leading to surplus gas accumulation that has pushed system pack beyond critical levels. Short on commitment with SNGPL: Power sector uses 28pc less RLNG SNGPL further highlighted that power consumption on July 17, 2025 was recorded at 300 MMCFD, leading to continued gas accumulation in the system, which is unsustainable. 'If RLNG off-take is not immediately increased and maintained as per demand, the resulting high pressures may disrupt re-gasification at terminals, risking cargo discharge delays and potential financial losses in the form of demurrages and take-or-pay applicability. Alternatively, SNGPL shall be constrained to further curtail supplies from local gas fields,' said Directorate General (Gas) Petroleum Division. According to sources, Power Division has been requested to advise the concerned quarters to increase RLNG off-take as per demand for the month of July 2025 with re-coupment of previously unconsumed volumes to ensure smooth operation of the SNGPL system and to avoid any untoward situation in the national interest. On July 10, 2025, responding to the comments of Minister for Petroleum and Natural Resources Ali Pervaiz Malik on underutilisation of RLNG by the IPPs, Minister for Power, Sardar Awais Ahmad Khan Leghari staunchly defended the Economic Merit Order (EMO), declaring that any attempt to alter it would be a 'grave sin' (Gunnah Kabeera). He urged the Petroleum Division to review Liquefied Natural Gas (LNG) contracts—if necessary—just as the Power Division had done with Independent Power Producers. 'Ali Pervaiz Malik is a close friend, and his concerns are valid if the contracts are flawed,' Leghari said. 'Power plants operate under the EMO, which prioritises electricity generation from the cheapest sources. If RLNG plants don't qualify under EMO, they simply can't be operated,' he further explained. National Electric Power Regulatory Authority (Nepra) has been sharing violations of EMO by the System Operator during the public hearings on FCAs, on the basis of which billions of rupees of NGC (former NTDC) were withheld. However, this exercise has now almost been stopped without any reason. Nepra has directed that the System Operator and NGC must present a comprehensive update that includes covering outages of economic power plants, the resulting financial impact, and reliance on out-of-merit generation. The update should also include the status of identified system constraint, progress made, revised completion timelines and associated financial implications. At a recent meeting on gas issues, the representative of Power Division commented that challenges need to be met and disruptions need to be looked into. The Chair responded that the tactical issues would be discussed later and, presently, the focus needs to be on sustainability of the gas sector and how LNG over supply/ less off-take is affecting it. Secretary Petroleum framed the key issues to be addressed by the Committee, namely rationalisation of gas tariffs (for both indigenous and imported gas), synchronisation of LNG demand with the power sector along with resolution of circular debt within the gas sector. Copyright Business Recorder, 2025
Business Recorder
19-07-2025
- Politics
- Business Recorder
JI to stage sit-ins against ‘sugar mafia' today
LAHORE: Jamaat-e-Islami (JI) Chief Hafiz Naeem-ur-Rehman has announced that the party will stage protest sit-ins across Islamabad and all divisional headquarters today (Sunday) against the exploitative 'sugar mafia' and hike in electricity, gas, and petrol prices. He also declared the launch of 'Give Rights to Balochistan' long march from Quetta on July 25 which will eventually head toward Islamabad. Addressing a press conference in Islamabad on Saturday, Rehman criticized the government's anti-people economic policies and the main opposition parties' passivity. 'When it comes to their personal gains, all factions unite and approve 300 percent raises in their own salaries.' He said the government deceived the people with false claims like a Rs. 7.41 per unit reduction in electricity rates which never materialized. The petrol prices, he added, continue to rise every 15 days despite declining global rates. 'The imposition of the slab system and continued hikes in electricity and gas prices are nothing short of fraud against the public. We demand the end of the slab system and the removal of unjust taxes from electricity bills,' he stated. Rehman lashed out at the sugar mafia, noting that 90 percent of the country's 89 sugar mills are controlled by the ruling parties and influential figures. 'Dealerships are handed to unregistered agents who are protected by every government. Sugar prices have surged from Rs. 140 to Rs. 200 per kg, imposing a heavy burden on the people,' he said. He revealed that gas wells were deliberately shut down on instructions from the Petroleum Division, resulting in a $1.5 billion loss to the national economy. He said the past governments entered RLNG agreements against national interests. The JI chief stressed the need for aggressive diplomatic efforts on Kashmir, referencing the July 19, 1947 resolution passed at the residence of Sardar Ibrahim Khan for accession to Pakistan. 'Today, Kashmiris worldwide are observing 'Youm-e-Ilhaq-e-Pakistan'. Pakistan must push forward a bold Kashmir policy. Any international mediation that undermines the wishes of the Kashmiri people is unacceptable,' he emphasized. Hafiz Rehman reiterated that India and the US are behind the unrest in Balochistan. He emphasised empowering local populations and announced that grand jirgas would soon be held in both Khyber Pakhtunkhwa and Balochistan to address regional grievances. Regarding the upcoming 'Balochistan Rights March', he warned the government against obstructing it: 'If the government tries to stop this peaceful democratic movement, it will bear responsibility for the consequences.' The JI leader also raised concerns about lawlessness in Sindh's riverine areas, pointing to the unhindered flow of weapons, the abduction of minority traders, and the PPP's failure to maintain law and order. Calling on the youth to join Jamaat-e-Islami, he remarked that the ruling elite and opposition are united only in safeguarding their own interests, showing indifference to the struggles of ordinary citizens. Criticizing the recent decision on reserved seats, he termed it a murder of justice, stating that even the affected parties failed to raise their voices and instead became part of the deal. Copyright Business Recorder, 2025
Express Tribune
17-07-2025
- Business
- Express Tribune
Govt poised to do away with cross-subsidies for gas
Listen to article The government is set to end cross-subsidy for domestic gas consumers and introduce a direct budgeted subsidy model by 2026, in line with the mechanism established for the Power Division. The federal government is locked in negotiations with the International Monetary Fund (IMF) under the Resilience and Sustainability Facility to replace cross-subsidies with direct subsidies commensurate with the consumer income levels under the Benazir Income Support Programme. In a recent meeting, the Petroleum Division informed the cabinet that they were engaged with the IMF and the new system was likely to be developed by 2026. It said that it had already hired advisory firm KPMG and a dedicated group had been formed to examine the replacement of cross-subsidies as part of efforts to revitalise the gas sector. It was revealed that residential consumers were benefitting from a cross-subsidy of over Rs150 billion, financed by imposing higher tariffs on captive power plants, industrial and commercial consumers. The Petroleum Division added that, as part of reforms agreed with the IMF, a levy had been imposed on the captive power plants. As a result, gas prices for them have increased, consumption has declined and the ability to cross-subsidise residential consumers has gone down. It was highlighted while discussing a court case in Balochistan relating to Sui Southern Gas Company (SSGC). SSGC receives around 111 million cubic feet per day (mmcfd) of gas from Balochistan fields (Sui and Zarghon), which is insufficient to meet winter demand from domestic consumers in the province, which peaks at 210 mmcfd. To make up for the deficit, SSGC diverts gas from its sources in Sindh, which in turn faces low pressure and load management in winter. SSGC claims that more than 26 billion cubic feet (bcf) – 59% of the total of 44 bcf supplied to Balochistan — was either stolen or illegally consumed by tampering with gas meters. The Petroleum Division said that, as reported, while SSGC's operations in Sindh recorded unaccounted-for-gas (UFG) losses of 9.5% during financial year 2022-23, the losses in Balochistan stood at a staggering 59.7%. The loss resulting from low or no recoveries in Balochistan was estimated at Rs22 billion. Despite persistently high UFG losses, SSGC continued to operate and invest in the area to support the government's socioeconomic development agenda and to comply with orders issued from time to time by the Balochistan High Court regarding maintenance of adequate supply pressure during winters. The Balochistan High Court restrained SSGC in May 2023 from charging more than Rs5,700 in monthly gas bills. It also constituted a commission for making recommendations on gas tariffs to be charged in the colder areas of Balochistan. The commission made the following domestic tariff recommendations: for summer, 200 cubic metres at Rs250 per million British thermal units (mmBtu), totaling Rs2,551 per month; and for winter, 590 cubic metres at Rs500 per mmBtu, totaling Rs8,848 per month. Over five months, the maximum amount payable would be Rs62,092. Consumption above 590 cubic metres would attract the non-protected category tariff of Rs5,174 per month. The Petroleum Division shared that the Balochistan High Court, through its order dated June 13, 2024, directed SSGC to implement the commission's recommendations with retrospective effect from November 2023, resulting in revenue losses. In accordance with the notified tariff effective from February 1, 2025 under Section 8(3) of the Ogra Ordinance, 2002, monthly charges for two slabs were worked out as under: For consumption up to 200 cubic meters, the notified rate is Rs4,200 per mmBtu, totaling Rs15,827, plus Rs2,000 in fixed charges, taking the total monthly bill to Rs17,827. For consumption above 400 cubic meters, the gas charges are Rs106,441 plus Rs2,000 in fixed charges, totalling Rs108,441. The Petroleum Division argued that the tariff structure recommended by the commission conflicted with the government's approved tariff, causing revenue losses. It was further outlined that the Balochistan High Court's order was challenged by SSGC in the Supreme Court. The apex court, through its order dated October 24, 2024, directed the Oil and Gas Regulatory Authority (Ogra) to thoroughly review the commission's report and finalise recommendations through hearings and consultations with all relevant parties. The cabinet was informed that Ogra held a hearing on November 11, 2024 and issued its findings on November 22. In its report, Ogra emphasised that commission members could not cite any statutory provision for recommending a special tariff for Balochistan consumers.
Express Tribune
09-07-2025
- Business
- Express Tribune
WB likely to aid Reko Diq plan
Pakistan has already chalked out a $1.9 billion funding plan to execute the Reko Diq copper and gold mining project. Total project funding has been estimated at $4.297 billion. Photo: File The World Bank is likely to provide technical assistance for developing an integrated infrastructure roadmap and socio-economic development plan for Reko Diq and other mining sites in Balochistan, sources told The Express Tribune on Wednesday. They said that a World Bank representative has consented to technical assistance plan in a recent meeting of the Non-Lending Technical Assistance Committee (NLTAC) held at the Economic Affairs Ministry. The NLTAC discussed a proposal from the Petroleum Division of the Energy Ministry to seek technical support from the World Bank for the development of an integrated infrastructure roadmap and socio-economic development plan for the Reko Diq and other mining sites in Balochistan. The meeting, chaired by the economic affairs secretary, received a briefing from the petroleum secretary, who stressed the need for incorporating socio-economic uplift through community and infrastructure development, while safeguarding environmental aspects in ongoing mining operations. Pakistan's mining industry is currently at a nascent stage, with very few medium-to-large scale projects. Pakistan has recently developed a harmonised legal and regulatory framework aligned with international best practices, according to a source. "There is a need to address environmental, social, and economic aspects at all phases of mining operationsfrom exploration and extraction to processing and site closure — for which the proposed technical assistance is being sought from the World Bank, the sources said, quoting from the briefing. The World Bank representative, the source said, informed that the proposed technical assistance would be arranged by the World Bank at its own end, with no financial liability on the part of the government of Pakistan. However, after the finalisation of plans under the NLTA, any subsequent development projects might be considered either under the World Bank support or through the private sector, following prescribed government procedures. The World Bank representative agreed to a Planning Ministry's proposal for hiring a consultancy firm and the internal discussions on the matter to determine the actual requirements of experts. The Petroleum Secretary said that the concept paper was at the finalisation stage. The committee agreed to forward the request of the Petroleum Division to the World Bank for the requisite technical assistance. It was also agreed that the Petroleum Division would share the concept paper with terms of reference for consultants who would be engaged through the World Bank.
