The Senate Committee on Petroleum was briefed on Tuesday about a significant increase in the circular debt within the gas sector. Over the past decade, the debt has surged by Rs1,700 billion, bringing the total to Rs2,897 billion.
The meeting, held under the chairmanship of Senator Umar Farooq at the Parliament House, revealed that the failure to increase gas tariffs from 2013 to 2023 led to this dramatic rise in circular debt. Officials from the Ministry of Petroleum indicated that the debt escalation has been halted by a recent triple hike in gas prices. However, there remains an annual gap of Rs800 billion between the official purchase and sale price of gas.
Three major companies account for 95% of the total circular debt, amounting to Rs2,752 billion. Specifically, OGDCL owes Rs1,133 billion, PSO Rs816 billion, and Pakistan Petroleum Limited Rs803 billion.
Additionally, the committee was informed about a 10% annual depletion rate of indigenous gas reserves. The committee recommended that detailed reports on gas consumption by provinces relative to their production be submitted in the next meeting.
