PM takes notice of challenges in energy sector

Calls important meeting to get sectoral briefing on power, petroleum, interior and industries

ISLAMABAD: Prime Minister Shehbaz Sharif has taken serious notice of electricity theft, gas price hike and the increasing scale of smuggling of petroleum products into Pakistan.

According to sources, the Prime Minister’s Office, in a most immediate letter on March 26, has called an important meeting to be held on Wednesday under the chair Prime Minister Shehbaz Sharif to get sectoral briefing regarding Power, Petroleum, Interior & Industries regarding illegal spectrum of goods/articles/ services.

The premier is likely to give a road map mainly to overhaul country’s energy sector and address critical challenges, said sources.

It is relevant to note that Oil Companies Advisory Council (OCAC) in a letter on March 25, 2024 to Secretary Petroleum, has called for stringent enforcement measures to combat the rampant smuggling of petroleum products that is estimated to be causing $35.6 million monthly losses, a situation it describes as an existential threat to the industry and government revenue.

“The staggering influx of 4,000 tonnes of smuggled fuel daily into Pakistan, as confirmed by the Oil and Gas Regulatory Authority (OGRA), is bleeding the nation of approximately $35.6 million per month. This national crisis demands swift and aggressive action,” said a letter of the OCAC, a representative body of the country’s oil sector.

Similarly, the Sui companies in their separate petitions have sought massive increase in the gas prices as SNGPL had requested a price increase of Rs 2,646.18 per Million British Thermal Unit (mmbtu) and requested to set a new average price of Rs 4446.89 while SSGC also requested an increase of Rs 274.40/mmbtu in gas prices from July 1, 2024, and fix the average gas price of Rs 1740.80/mmbtu.

Moreover, power price hike, capacity charges of the idle power plants and electricity theft in the power distribution companies (DISCOs) have become routing features in the country for last many years and the premier is annoyed over this situation which is adding additional burden on those power consumers who are paying their utility bills regularly.

As per sources, in an apparent bid to overhaul country’s energy sector and address critical challenges, Prime Minister Shehbaz Sharif has already issued a series of directives and decisions mainly to enhance exploration, promoting renewable energy, and streamlining governance within the sector.

And, the directives, outlined by the Prime Minister’s Office, cover a wide range of issues and emphasize the urgency of action to ensure timely implementation and progress monitoring.

Sources said that the Petroleum Division has been tasked with conducting an in-depth study and proposing exploration plans (including G2G), building upon previous benchmarking studies and the petroleum division is required to submit a report within three months.

They said PM directed the Petroleum Division to hire quality consultant for assisting in offshore gas exploration deals within two (02) month.

They said the PM also directed the petroleum division that an event to roll out the Tight Gas Exploration plan is to be organized within two weeks, with the Prime Minister attending as the Chief Guest.

They said the premier directed a committee, to be constituted by the Finance Division within two weeks, will propose amendments to the State-Owned Enterprises (SOE) Act, 2023, to enhance the competency of SOE boards.

PM further directed that an inter-ministerial committee will be formed immediately by the Petroleum Division to oversee the implementation of the Iran-Pakistan Gas Pipeline Project, said sources.

Sharing details of the directions given by the Prime Minister, the sources said that the Petroleum and Power Divisions are tasked with jointly developing a plan to address circular debt flow and establishing a Project Management Unit (PMU) for effective monitoring.

Similarly, PM directed that a signing ceremony for Refinery Upgrade Agreements under the Brownfield Refinery Policy is to be arranged by the petroleum division within two weeks, in the presence of the Prime Minister.

Likewise, the Power Division is directed to resolve net metering issues within one month to promote solarization.

Moreover, the PM directed National Energy Efficiency and Conservation Authority (NEECA) and Power Division to submit a report on the status of energy conservation standards for home appliances to the Prime Minister within three days.

In addition, PM directed petroleum, power divisions that weather conditions shall be factored-in for smooth execution of Ramazan demand supply plan of oil, gas/electricity.

It is also learnt from sources that Ministry of Science & Technology has been directed that plan for promotion of biomass fuel pellets shall be executed within one month in consultation with provinces.

They said PM directed that power division, in consultation with Board of Investment (BOA) and Industries & Production Division shall submit a proposal within one month to address issue of surplus power capacity by developing industrial zones.

They said PM directed petroleum division to engage consultant to asses magnitude of losses due to infrastructure degradation/gas theft/inefficiency and help find remedies.

Similarly, they said PM directed that petroleum division, Principal Staff Officer (PSO) to the PM that focal persons from National Assembly (NA) constituencies shall be nominated within three days for distribution of Ramazan Package by SOEs out of their own resources. Likewise, they said PM directed petroleum division that third-party forensic analysis of Sui companies’ revenue requirements as determined by OGRA should be submitted within one month.

Furthermore, PM directed petroleum division, power division and PSO to PM that presentations on Weighted Average Cost of Gas (WACOG), mineral sector, offshore gas, tight gas, unbundling of sui companies, and standards for energy efficiency for home appliances shall be made to the PM within one month, said sources.


Ahmad Ahmadani
Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected].


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