ISLAMABAD: The federal government has transferred Secretary of Petroleum Mohammad Momin Agha with immediate effect, amid mounting concerns over the rapidly rising circular debt in the gas sector and delays in key reform initiatives.
According to sources, Momin Agha was removed after failing to rein in the ballooning circular debt despite “loud and clear” instructions from the Prime Minister. He also remained unsuccessful in implementing the long-promised digitalisation of the oil sector, covering refineries, imports, supply chains, and sales at petrol pumps. Sources added that several other undisclosed factors also contributed to the decision.
The Petroleum Minister, sources said, had been pressing for the appointment of a more energetic and proactive Secretary to steer the division through the critical challenges facing the oil and gas sector.
It is also learned from sources that current Chairman of the FBR, Rashid Mahmood Langrial, is likely to become the next Secretary of the Petroleum Division. They, however, added that the name(s) of the next candidate(s) for the important position will be revealed within a week.
The Establishment Division has already issued a formal notification directing Mohammad Momin Agha to report to the Establishment Division with immediate effect.
In a separate notification issued by the Cabinet Secretariat’s Establishment Division, Mirza Nasir-ud-Din Mashhood Ahmad, a BS-22 officer of the Secretariat Group and currently serving as Special Secretary, Petroleum Division, has been assigned the look-after charge of the post of Secretary, Petroleum Division. He will hold the additional charge alongside his existing responsibilities until the posting of a regular incumbent.
The change comes at a time when the gas sector’s circular debt has surged to alarming levels.
According to industry estimates, the gas circular debt now stands at around Rs 3.2 trillion (Rs 3,200 billion) or even higher. In April 2025, the debt was estimated at around Rs 2.3 trillion, which increased to Rs 2.6 trillion by November–December 2025, before climbing sharply in early January 2026.
Sources said a significant portion of the gas sector’s circular debt, approximately Rs 1.45 trillion, comprises Late Payment Surcharges (LPS), indicating that the actual principal liability is comparatively lower. However, the continuous accumulation of LPS has further complicated efforts to stabilise the sector.
The rising debt is largely attributed to chronic non-recoveries, high unaccounted-for-gas (UFG) losses, tariff differentials, and the government’s diversion of costly imported RLNG to domestic consumers at subsidised rates.
When combined with the power sector’s circular debt, Pakistan’s total energy sector circular debt has now reached around Rs 5.6 trillion, posing serious risks to fiscal stability and the sustainability of the energy supply chain.
Sources said the government, in consultation with international partners including the International Monetary Fund (IMF), is exploring multiple options to manage and eventually eliminate the circular debt. However, they cautioned that meaningful progress will depend on structural reforms, improved governance, and strict enforcement of recovery and loss-reduction measures in both the gas and power sectors.
The leadership change at the Petroleum Division is being seen as a critical step in the government’s efforts to revive stalled reforms and address the deepening financial crisis in the energy sector.
