How Iqbal Z Ahmed became the Gas King of Pakistan

… and why his detractors believe he did not always play by the rules along the way


Search for Iqbal Z Ahmed on the internet and you will find stories of how one man has hijacked the energy sector of the country, particularly natural gas, and find tales of corruption surrounding his name. Meet the man and you will find story of a person who persisted through obstacles and went on to become one of the top businessmen of the country from modest beginnings. Which picture of the man is the truth is somewhat hard to discern, though it probably contains elements of both versions of his story.

His company Associated Group (AG) has business interests in the natural gas and power sectors of the country, media, and architecture and design. The Group also plans to move into aviation now.

It has been a bumpy ride for Iqbal Z Ahmed with many trials and tribulations but he persevered because, in his own words, he is a risk taker who likes challenges. Often called the Gas King of Pakistan, Iqbal Z Ahmed is also a king of controversies. His brainchild, the Jamshoro Joint Venture Ltd (JJVL), an LPG production plant in Sindh and the flagship company of AG, was one of the project that earned him his fortunes and his notoriety through the famous quota scandal.

But unlike other businessmen, he does not shun these controversies and cogently refutes criticism directed at him for his actions. He regrets that his critics talk about him – in his view – without knowing relevant facts, but is open to providing all sorts of clarifications, including providing immediate proof of his assertions, almost on-demand.

For instance, during the interview Iqbal Z Ahmed, CEO of AG, was asked as to whether Jamal Akbar Ansari, the CEO of Akbar Associates, an engineering firm with interests in the oil and gas sector of the country, was a partner in JJVL. The question came up because Ansari issued a press release, which was published in Pakistan Today, in which Ansari dissociated himself from Iqbal Z Ahmed and his businesses, including JJVL.

Ahmed, however, confirmed that Ansari was a partner and for further clarification made a call immediately to Ansari to confirm his partnership in JJVL.

In the call, which Profit can confirm since we were participants in it, Ansari, who was a rival of Ahmed in the race for securing a government contract for building the second liquefied natural gas (LNG) import terminal of the country but was disqualified for submitting a fake bank guarantee certificate, now confirmed that he was in fact a partner in JJVL. “I have 10% shares in JJVL from the inception of the company,” Jamal told Profit.

On a question asked by this scribe why he denied it earlier, Ansari said: “You guys [news media] questioned once if Akbar Associates was a partner in JJVL? These are two separate things. I have my personal shares in JJVL.”

“I like to clarify things. If somebody wants to confirm something, they can come talk to me directly. I will tell them what the facts are,” Ahmed said while disconnecting the call.

Humble Beginnings

Iqbal Zafaruddin Ahmed, or Iqbal Z Ahmed as he prefers to be called, was born in 1946 to an officer in the Police Service of Pakistan. After graduating from Aitchison College, he completed a Masters degree in economics from Government College in Lahore. From there onwards, he delved into business and never looked back.

From the time he was studying in Aitchison College, Ahmed did not want to do anything else except have his own business because he believed that it would enable him to make contributions to the society and the economy and he claims to have eventually dedicated his whole life to it.

“I had options to go abroad but I opted to stay with my parents and work here,” Ahmed told Profit.

But it has been a difficult journey, according to Ahmed, because in Pakistan, new ideas are frowned upon. “There is no support to a new idea and it creates enmity. But that’s life, I suppose. It happens everywhere, except that Pakistan might be a little more pronounced,” he says.

The foundations of the Associated Group were laid by Ahmed’s father, Zafar Ziauddin Ahmed (Z. Z. Ahmed) when he retired from the Police service in 1958 and started dabbling with business. For the passion of business, Ahmed joined him while he was studying and offered his father all the help he could until he graduated from Government College in 1968 and joined his father’s business full-time.

The family’s first stint into business was an agency for selling scooters after Wajid Ali Shah of Ali Autos gave them an agency contract for selling Italian made Lambretta scooters in Lahore.

“We started off with a small shop. Lambretta was in competition with Vespa scooters at that time. We got their agency for Lahore and we did well on that,” he said as he delved into history of his family’s business.

A little further into time and the family entered into the business of televisions when the Wazir Ali Group went into the business of making televisions under licence from the NEC Corporation of Japan.

“The Wazir Ali Group made us an agent. We did very well by God’s grace. So well that NEC Corporation ended up making us an agent for Pakistan rather than the Wazir Ali Group. The business did very well till until we had to shut down because NEC halted its television production and went into the business of computers and communications,” said Ahmed.

At that point, through an introduction from acquaintances, the family also started importing Yugoslavian tractors from a Serbian company called Industry for Machines and Tractors (IMT), which had a license from Massey Ferguson, the then-British-Canadian farm equipment giant which is now based in the United States.

The business went well until the government of Zulfiqar Ali Bhutto nationalised the tractor import business, leaving all the liabilities with the company but the import was now with the government. The setback put the business into hibernation until 1980 when Ahmed again went into the tractor business but this time in local manufacturing.

“Millat Tractors at that time was already in business and so was Ghazi. We were the third plant which was inaugurated by General Ziaul Haq, who was the president at that time. Till our plant, the general nature of tractor industry here was that of assembly plants. I would like to take the credit of introducing the vendor development system, which others have related to and which has led to far greater indigenization of local components in the production of tractors. I think it was a good start and it is a contribution that I am happy that I was able to make,” he says.

After a failed attempt to get into the manufacturing of automobiles and bring the British-made car Morris into Pakistan, Iqbal Z Ahmed entered into gas business in 1989 and set up Lub Gas — a liquified petroleum gas (LPG) marketing company responsible for sales and distribution of LPG, followed by another marketing company called Mehran LPG in 1997. Since then, the company has reinforced its presence in the LPG sector by setting up LPG production plant in 2005 under the name of Jamshoro Joint Venture Ltd (JJVL) in Badin gas field near Hyderabad.

The decision to go into the gas sector as explained by Ahmed was motivated by the fact that the tractor business was faltering because they were getting their tractors from Serbia. “Serbia and Muslims were not getting along. Serbia became subject to a lot of sanctions. We had to get involved in something. That is when we decided to bid adieu to engineering sector and try our luck somewhere else. At that point, we got an opportunity in introducing LPG.”

The watershed moment for the company was when in 2000, the state-owned Sui Southern Gas Company Ltd (SSGC) advertised for setting up an LPG extraction plant after a gas field was discovered in 1988 in Badin near Hyderabad.

“Between 1988 and 2000, seven attempts were made to setup the LPG extraction plant but none materialised. They did not materialise because it carried high risks as there was no guarantee of the life of the reservoir. The owners of the gas field at that time – Union Texas – refused to set up the plant. [The state-owned] Oil and Gas Development Corporation (OGDC) was asked to setup the plant, and they refused. SSGC was asked to setup the plant, they refused. When the bids came for first time, they were cancelled for whatever reason. Then it happened the second time and the third time. The last time the bid came, nine parties qualified but the bid was received only from us,” he disclosed.

In his words, the venture was so risky that people such as Razzak Dawood, one of the people who qualified for the bid, backed out saying that the project was too complicated and too risky.

But Ahmed still took the risk and started setting up the plant even though established businesses warned him that the project was too risky and that they will not accept allocations from him because these companies would have to invest in metal to buy cylinders to give to consumers, but would not do so because they thought the project would fail.

“They told us that they thought the plant will fail because of three reasons: a) because we did not know the business b) because there was a huge risk on gas reservoirs and that the production will drop very rapidly and c) they believed that the government policies were such that they were not pro-investment in this sector as could be seen because nobody else had come into this sector. If it had been pro-investment, somebody would have made a move into this sector,” he said.

Compared to the risk, the opportunity Ahmed saw at that time was of tens of million people in an energy starved country that had little emphasis on infrastructure and development. Ahmed already had a sales and distribution network in place through marketing companies Lub and Mehran.

“There was a great opportunity to bring energy to people at their doorsteps. We took the risk and setup the production plant (JJVL) and also set up almost 30 new marketing companies with people, friends and associates who had faith in me,” he said.

The way the business was structured, JJVL would extract the LPG from the gas field and allocate quotas to marketing companies for sale and distribution to consumers where piped gas was not available. Through the marketing companies belonging to his friends and the two that he setup himself, Ahmed had wide network of sales and distribution of LPG.

Though the business was a hit, it came under a lot of criticism for giving allocations to army generals, politicians and bureaucrats, mostly friends of Ahmed. And it was not just for who got the marketing quotas that Ahmed received criticism. There were allegations that Ahmed ran a cartel that kept LPG prices artificially high for consumers.

In 2009, those allegations were substantiated when the Competition Commission of Pakistan (CCP) fined JJVL Rs278 million for keeping LPG prices artificially high in collusion with the LPG Association of Pakistan, then headed by Ahmed.

For his part, Ahmed denies wrongdoing even now. “I am criticised for giving gas allocations to my friends who happen to be generals and politicians. My answer is very simple: why don’t you ask the same question from a Toyota manufacturer or a cement or ghee manufacturer?,” he said. “It is my product! Where was the condition that I could give to A [and] not to B, give to C not to D. The only qualification that was required was that any allocation made by us was subject to an OGRA license. If I violated that, please hang me.”

Ahmed claims that he made those allocations only to retired generals who were his friends, and who had spent a lifetime together with him and who were looking for opportunities. “I brought women into this business, I brought young men into this business. As a result of JJVL and the investment that has been mobilised and as a result of policies of the government at that time, over $1 billion was invested in the LPG sector,” he said.

“As far as the Competition Commission is concerned, they fined everybody at that time. I have no hesitation in saying that CCP at that time was completely mad. They fined banking council, the banking association, the cement association, the ghee association, the LPG association. And because it was all fake, nobody paid anything. Everybody got a stay and nothing has happened since. I am not the only one, everybody and their uncle was fined,” he said, “The LPG Association of Pakistan consists of about 100 companies, who have daggers drawn at each other, so collusion between them to control the price was not even possible.”

The era he is talking about is 2006 through 2010, when the CCP was headed by Khalid Mirza, the legendary civil servant and former World Bank executive who turned around the Securities and Exchanges Commission of Pakistan in the early 2000s and then created the Competition Commission of Pakistan (initially called the Monopoly Control Authority). Mirza fearlessly took on oligopolies in virtually every industry before ultimately being ousted from his job in 2010 by President Asif Ali Zardari after arousing the ire of virtually every powerful business lobby in the country.

And since then, the CCP has not been able to pursue significant anti-trust enforcement action against any major companies, and has found its cases mired in the courts for years.

“No judge has been able to pass anything on that. On three different occasions, the cases were argued and concluded but every time the decision was to be made, the judge became judge of the Supreme Court. If the CCP is so concerned, why don’t they go to the court and ask for a quick decision? Or submit an application in the court that the case is pending from some time please give a decision on this. Public interest litigation. Let us decide it once and for all,” he questioned.

The troubles for the Associated Group, however, did not end there. In 2013, the Supreme Court struck down the project after it found out that the agreement between SSGC and JJVL to set up the plant was rigged in favour of JJVL for calculating royalty payments to SSGC, causing a loss of Rs22 billion to the state-owned company.

The court documents say that the royalty paid by JJVL to SSGC for extracting LPG was to be calculated according to the import price of the LPG. However, JJVL paid the royalty using local LPG prices as the benchmark, causing a loss of approximately Rs22 billion to SSGC.

According to court documents, JJVL contended that it never agreed to the formula of using import prices of LPG as the basis for calculating royalty payments. In fact, the JJVL contended in the court that using import price of LPG, which was higher than the local price, as benchmark for calculating royalty payments, would have made them un-competitive in the market.

“My argument is that you are making a Pakistani product and you are selling it in Pakistan. The LPG price was linked to the highest price in Pakistan. The government agencies were setting the price. The biggest producers at that time were the OGDC and PARCO. These were the people who set the prices. We just followed them. If I was getting a discount on that, then it would have been wrong. How can I sell my product at a higher price among people who have a similar product to offer, in the same market. It will make me uncompetitive. But nobody goes into these details,” Ahmed Z Ahmed said.

“It would have been wrong if I was the only one getting benefit. But it was for the whole industry. It was the policy,” he added.

The petition, filed in the Supreme Court by Khawaja Asif, a Pakistan Muslim League-Nawaz (PML-N) Member of the National Assembly who would later go on to become the Minister for Water and Power under the Nawaz Administration, also contended that the bidding process through which JJVL acquired the contract for setting up the LPG extraction plant was defective as the bid bond worth $100,000 which was required to submitted along with the bid, was submitted after the deadline had expired.

“We submitted the bid without a bid bond but the bid bond was issued on that date. We had attached the photocopy. The actual bond, because of PIA’s flights being stuck, was delivered the next day. As per powers available with the board of SSGC, a proper meeting was held and they could have cancelled the bid, which they had done on three previous occasions and they could have gone on forever or they could proceed,” he explained.

Ahmed explained that the fallout of cancelling the bid would have been that the right to setup the LPG plant would have gone from SSGC to British Petroleum. According to an agreement, SSGC had up till 2003 to award the extraction project before the rights to do so reverted to British Petroleum. In that case, said Ahmed, all the royalty which SSGC made, the Rs49 billion of it, would have become zero.

“Nobody talks about these facts. I mean these are the things which are very good to talk on TV shows but please let’s get into the facts. Come and sit down with me on a piece of paper and let me walk you through each document. Let’s determine what was the benefit and what was not the benefit, and let an expert decide,” he said.

“Over the life of the project, we have saved a billion dollars in foreign exchange and we have created 5,000 jobs directly and indirectly,” he said.

Why Khawaja Asif moved in court against Iqbal Z Ahmed, and that too after almost a decade, is not known to Ahmed. But he says that he has no grudge against Khawaja Asif. “It was his conscience. I never had any bad blood with him. He was a friend. I don’t know why he did it. I never asked and he never informed.”

Talking to Profit, Khawaja Asif said that the case was never filed on a personal basis against Iqbal Z Ahmed.  

On a question why it took him almost 8 years to file the case as the agreement between JJVL and SSGC was signed in 2003 while the petition with the SC was filed in 2011, Asif said that from a legal point of view, he didn’t have a locus standi to go to the court directly and instead, the matter was raised in the National Assembly repeatedly and was referred to a standing committee of the lower house.

“Once I had the findings of the standing committee, that became the basis of my petition. I went to the court with these findings, told them that these are the findings of the committee but the government [then of Pakistan People’s Party (PPP)] was reluctant to implement these recommendations,” he said.

Asif, however, again reiterated that in these cases, he was not seeking anything against anybody specifically. “The agreement to set up the LPG plant, as noted by the Supreme Court, was amended for the benefit of JJVL in the Musharraf era. The PPP was also doing nothing about it.  We just made an attempt to stop the plunder at some point. If we could not undo what had been done before, we could at least stop it at a certain point. In the same spirit, I filed a petition against Rental Power Plants (RPPs) and we were successful in stopping them,” he added.

The Rental Power Plants

In 2006, then President Pervez Musharraf’s government, to overcome rampant power shortages in the country, floated the idea of granting small power plants contracts of between three and five years to produce power, add it to the national grid and earn profits by selling the electricity to consumers. These power plants would come to be known as the rental power plants (RPPs). The government would meanwhile work on longer-term projects like hydroelectric power for a long term solution.

One of the company that invested in setting up the RPPs was Pakistan Power Resources (PPR), a company owned by Iqbal Z Ahmed.

In March 2012, Supreme Court, on a petition filed again by Khawaja Asif, declared the RPPs illegal in a verdict that observed that the contracts to establish the power plants, signed between 2006 and 2008, were awarded in a non-transparent manner and therefore ordered that these be rescinded.

Ahmed alleges that the project was politicised because it was introduced by Musharraf, a known friend of Ahmed at that time. “It was politicised because Musharraf initiated it and [Pakistan] Peoples Party wanted to push it hard. But then PML-N took it on. And because PML-N took it on, the whole deal was cancelled at that time.”

“When the court decided the case, it was decided mainly by [then-Chief Justice] Iftikhar Muhammad Chaudhry in his own whimsical way. But show me an iota of corruption. Show me a corruption chain, that the concept was wrong. Show me that so and so received so much money from so and so,” he added.

“It was a damn good concept. Bangladesh followed it, India emulated it. Many countries in Africa emulated it,” Ahmed said.

He, however, admitted that the plants were less efficient and because of being less efficient, they consumed more fuel, making them more costly than combined cycle thermal power plants. But the choice at that time was between slightly less power or no power and 1% of additional power was worth about a $1 billion for the economy, he claimed.

“Nobody went into these facts. I invested a lot of money. The deal was cancelled by the Supreme Court and we were made to pay all the advance that we had. We paid with 12% interest in dollar terms at that time. The amount ran in tens of millions of dollars. We paid something like Rs5-6 billion,” he said.

“So it’s been a challenge. Life goes on but these challenges have to be faced head on. And I have no complaints or bitterness about anything,” he said.

Undeterred by the misgivings of the JJVL project and RPPs, Ahmed moved onto the LNG import business and set up a floating LNG import terminal to meet energy demands of the country. Together with equity partner Trafigura Holdings Ltd, a multi-billion dollar international energy trader, Ahmed’s Pakistan GasPort Ltd (PGPL), through its wholly owned subsidiary Pakistan GasPort Consortium Ltd (PGPC) owns and operates an LNG import terminal at Port Qasim in Karachi.

The LNG terminal project represents a combined investment of half a billion dollars among PGPL, Fauji Foundation’s Fauji Oil Terminal & Distribution Company Ltd (FOTCO) which operates the terminal and Norway’s BW Group which operates the ship.

While most of its operations are concentrated in the energy sector, the Associated Group is involved in architecture design, engineering and obviously media.

His Group publishes the Pakistan edition of Newsweek and his aspirations to start a news channel of his own are well known. In fact in 2012 the group was in negotiations to partner with American news media giant Cable News Network (CNN). For Iqbal Z. Ahmed this was a perfect industry to invest in as it is common for Pakistani businessmen, especially those who regularly get into trouble with the state authorities, to try and expand their influence through media, particularly the news media. It not only hedges them against smearing campaigns by domestic media houses sometimes owned by rivals in business or politics, but a presence in news media also serves as an insurance against perceived excesses of the state and helps businessmen propagate their agenda.

In the case of JJVL, the Ahmed family has the majority shareholding, with Iqbal Z Ahmed holding 52% of the shares himself and a percentage held by two of his sons individually. Other partners include Jamal Akbar Ansari of Akbar Associates, who holds 10% shareholding.

In the LNG business, JJVL has shareholding in Pakistan GasPort Ltd which in turn owns Pakistan Gasport Consortium Ltd. Together with individual shareholdings and the shareholdings of JJVL, the Ahmed family has 52% ownership of the LNG terminal as well. Other notable investors in the LNG project include Mian Amir Mahmood and Syed Yawar Ali of the Babar Ali family.

Lub Gas and Mehran LPG are majority owned by the family with small external shareholdings.

The Group also operates a philanthropic arm by the name of Zohra and ZZ Ahmed Foundation that supports education, health, and community development projects and the arts. One of Ahmed’s sons, Razi Ahmed, is the founder of Lahore Literary Festival, a cultural festival that aims to bring together, discuss, and celebrate the diverse and pluralistic literary traditions of Lahore.

Plans Ahead

Together with its equity partner Trafigura, the Group is setting up another LNG terminal, 100% externally financed, for the private sector, without any dealings with the government under a new entity called Pakistan Gas Solutions Ltd.

“Our contractor has given to the government a timeline of 10 months, Trafigura has given a timeline of 12 months. We are ready, we have the vessel, we have the contractor, we have the finances. There is a small thing pending with the [Port Qasim Authority] PQA that is regarding orientation of the jetty. Once that is done, we are ready to go,” says Ahmed.

For the project, Ahmed says they will not borrow anything in Pakistan and everything will come through equity or borrowing outside Pakistan. The plan also includes bringing their own LNG, selling it to private buyers, without any involvement of the government in importing the LNG or selling it.

“We will also develop our own systems of gas delivery. We are delivering what is called a virtual pipeline. Because the problem for any LNG terminal, we or the new ones, will be the transmission of gas from Karachi to the North. The third pipeline is yet to be made. The present capacity is fully utilized. How is the gas to be brought here is the question. The government pipeline will come in due course of time but the government being government takes time. So we want to develop a virtual pipeline system of delivery directly from the port to the consumer,” he said.

Virtual pipelines are scheduled shipments in containers by rail or road. Virtual gas pipeline operations supply markets that are either too small for normal LNG large-scale carriers or too geographically challenging to justify an investment in pipeline construction.

Among other plans, the Group wants to launch a commercial airline service that will target businessmen, executives and bankers as their niche market. It will be an all business class airline operating within Pakistan. The group is looking to make an investment of $15 million for this project, which is in the advanced stages of implementation.

“We have identified Embraer E-190 as potential aircraft for the service. It’s a 80-passenger aircraft. All business class seats. We are targeting to start our commercial operations from January 1, 2020,” Ahmed said.

“I love aviation. It is my passion. I love reading about it. And I want to show the difference between the present flying and what a good airline can do,” he added.


  1. You think people want to waste their time on reading so long material on someone who is already known as the most corrupt businessman. Please make it brief so that we don’t waste our time.

  2. That’s the problem in our dear country. Everything is so murky and muddy that’s it’s hard to get a clear picture.

    Reading this article it seems that this guy is just a good businessman who took opportunities when he saw them. Good for him and good for the country.

  3. Pakistan really need such dynamic and enterprising businessmen like Iqbal. Z.Ahmed for flourishing businesses and the economy. It is difficult to draw a line between the corruption and the flourishing business of the State not only in Pakistan but all over rapidly developing countries in the world, nor it is desired to put unnecessary brakes over businesses.

  4. The bottom line is that Iqbal Z Ahmed is a successful entrepreneur who is good at wealth creation and at creating jobs and new businesses. Pakistan needs him and more like him.

Comments are closed.