The Sindh government has formally urged the federal government to reverse a Council of Common Interests (CCI) decision allowing exploration and production (E&P) companies to sell 35% of their gas to the private sector at auctioned prices.
According to a news report, this policy change, approved under the Petroleum E&P Policy 2012 during the caretaker regime on January 29, 2024, has sparked concerns over its impact on provincial rights under Articles 158 and 172(3) of the Constitution.
Sindh’s plea to convene a fresh CCI meeting emphasizes that the caretaker government lacked constitutional authority to enact irreversible policy changes. The provincial government argues that such decisions should be left to the incoming elected administration to avoid compromising constitutional provisions and provincial autonomy.
Energy ministry officials revealed that reversing the policy could jeopardize an anticipated $5 billion investment by E&P companies, pledged to former Prime Minister Shehbaz Sharif. This investment is contingent on implementing the amended E&P Policy 2012, which was approved by the Economic Coordination Committee (Ecnec) after endorsement by the 20-member task force led by Deputy Prime Minister Ishaq Dar.
The policy amendment grants E&P companies the right to sell 35% of their pipeline-spec gas directly to third parties through competitive auctions without federal approval. It also specifies that gas from unallocated discoveries under existing licences and leases falls under this framework.
Sindh contends the policy violates Article 158, which prioritizes gas for the province where the wellhead is located. The government fears competitive bidding for gas will force local bidders to compete with higher offers from non-gas-producing provinces, undermining provincial rights.
In the January 29 CCI meeting chaired by then-caretaker Prime Minister Anwarul Haq Kakar, Sindh’s then-chief minister acknowledged the importance of the amendments for the industry. However, he noted the summary was not received in time for thorough review and called for a detailed discussion in a subsequent CCI meeting.
The provincial government maintains that Article 158 ensures preferential rights for local consumers over other regions. It warned that caretaker policymakers overstepped their mandate by amending a policy with far-reaching consequences. Sindh has demanded a reversal of the decision and insists that any future gas sales framework must align with constitutional provisions safeguarding provincial resource rights.
