The Special Investment Facilitation Council (SIFC) has spearheaded key reforms in the energy sector, enabling private gas companies to reduce the circular debt burden by Rs71 billion annually, according to Universal Gas Distribution Company (UGDC) CEO Ghiyas Paracha.
According to a news report, Paracha highlighted that the government is projected to generate an additional Rs12 billion annually in sales tax revenue following the opening of the gas market. The reforms, introduced by amending the Petroleum Policy 2012, allow oil and gas exploration companies to sell 35% of their gas to third parties, a significant increase from the previous 10%. This change aims to improve the cash flows of energy firms and expand opportunities for private sector involvement.
Paracha, a member of the committee on gas led by Deputy Prime Minister Ishaq Dar, credited Army Chief General Asim Munir and the SIFC for driving these transformative measures. He praised the council’s consistent engagement with stakeholders, which ensured the successful implementation of the new policies.
Under the revised framework, companies supplying 100 MMCFD of gas are expected to pay approximately $255.5 million in advance, equivalent to Rs71.28 billion. This prepayment mechanism is designed to prevent the accumulation of additional circular debt.
The reforms are also anticipated to generate $46 million (approximately Rs12.81 billion) in sales tax revenue, further strengthening government finances.Â
Additionally, the policy could help Pakistan conserve foreign exchange by reducing reliance on imported LNG. Officials estimate that avoiding the import of even one LNG cargo annually could save the country around $400 million, providing a significant boost to the national treasury.
