ISLAMABAD: A 20-member Task Force on Gas-related Issues, led by Deputy Prime Minister Ishaq Dar, has been unable to finalise the Council of Common Interests’ decision to allocate 35% of future gas discoveries to the private sector, due to Petroleum Minister Musadik Malik’s repeated absences.
According to sources privy to the development, the delay in enforcing the CCI decision is apparently because of the repeated absence of Petroleum Minister Musadik Malik from key meetings, slowing progress on a policy that Ishaq Dar has been pushing for.
Ever since his appointment as Deputy PM, Ishaq Dar has been trying to craft a role for himself in shaping the economy. Part of this has been his leadership of different committee’s that would traditionally be led by the finance minister. However, Mr Dar has taken up command of committee’s like the one on privatisation and the CCI.
The CCI actually deliberates on matters related to interprovincial coordination. While it did not make sense for Mr Dar to be on the council as foreign minister, he has more overarching authority as Deputy PM. The council had earlier decided that 35% of any future natural gas discoveries in Pakistan would be given to the private sector. This was part of the incumbent government’s focus on selling natural resources, mining, and agriculture to foreign investors to try and improve Pakistan’s economy. The government claimed, as it does regularly, that this plan could unlock $5 billion. However, no evidence of this has been provided.
Despite four task force meetings convened to enforce the decision, the absence of Petroleum Minister Musadik Malik from two critical sessions has hindered a final decision, sources added. There seems to be a clear disconnect between the two cabinet members.
The sources revealed that the meetings held under DPM Dar’s leadership had full attendance, except for the petroleum minister, who initially consented to attend but failed to appear in the last two meetings. The absence has reportedly stalled deliberations on enforcing the CCI’s January 2024 directive, which mandates that 35 percent of gas from future discoveries be auctioned to the private sector through competitive bidding.
The Council of Common Interests (CCI), on January 26, 2024, approved the amended Exploration & Production (E&P) policy, stipulating the allocation of 35 percent of gas from future discoveries to the private sector. The CCI’s decision required the Petroleum Division to submit an implementation framework to the Executive Committee of the National Economic Council (ECNEC) for approval. However, despite the passage of eight months, the Petroleum Division has yet to present the framework to ECNEC, further delaying the policy’s implementation.
As per sources, the task force, led by Deputy Prime Minister Ishaq Dar, has held four meetings since the CCI decision, with Petroleum Minister Musadik Malik attending only the first two. Malik’s absence has reportedly caused frustration among task force members, as the decision’s enforcement is seen as crucial to attracting significant investment in the energy sector. Sources suggested that Malik’s reluctance stems from his opposition to allocating 35% of future gas finds to the private sector, as he believes the matter warrants reconsideration by the CCI.
While sources close to the task force have indicated that Malik is employing delaying tactics to prevent a final decision, the petroleum minister has denied these allegations. When approached for comment, Musadik Malik clarified that his absence from recent meetings was due to prior engagements, including his participation in the Russian Energy Week in Moscow. He emphasised that he is not opposed to the policy and that his ministry is actively working on a framework to implement the CCI’s decision.
In the absence of the petroleum minister, the task force continues to address other critical issues related to the energy sector. In a meeting held on Monday, the committee discussed topics including high-speed diesel imports, the utilisation of additional LNG, and the allocation of gas to the Fauji Fertilizer plant. However, despite the ongoing discussions, the key issue of the 35 percent gas allocation remains unresolved.
Deputy Prime Minister Ishaq Dar, frustrated by the repeated delays, has called for swift action to enforce the CCI’s decision. He urged the committee to reach a unanimous conclusion on the allocation of gas from future discoveries to the private sector. Sources close to the task force have revealed that Dar plans to convene another meeting next week, hoping to break the deadlock and move forward with the policy’s implementation.
It is also learnt from sources that the Finance Minister, Minister for Maritime Affairs, Secretary Petroleum, Managing Director PSO, MD SNGPL, CEO UGDC etc. have attended this important meeting.
It is pertinent to mention that with mounting pressure to resolve the matter, it remains to be seen whether the task force can overcome the internal disagreements and finally implement a decision that could prove crucial for Pakistan’s energy sector and economy.
