The private sector seeks to distribute gas

The private sector urged the government to distribute the surplus of indigenous gas to private loaders, as supplies are limited due to imports of liquefied natural gas (LNG).

The private sector is reluctant to receive LNG traditions, which created a gluten on the market. Several loads of LNGs have been diverted so far due to low demand.

Due to LNG imports, oil and gas exploration companies were forced to limit local gas supply by 300 to 400 million cubic feet a day (MMCFD). Earlier, exploration companies had approached the prime minister, saying they were experiencing a loss of 12 billion Rs due to the cuts in supplies.

Given that the government had increased the distribution of newly formed GAS to third parties from 10% to 35% to help improve the cash flow of these companies. Although this policy was approved earlier in 2025, exploration companies did not give natural gas to third parties, which disappointed private loaders.

Now, private loaders have sought to distribute the gas limited to LNG imports. They buy indigenous gas at prices higher than the LNG.

While exploration companies welcomed the increase in gas distribution from 10% to 35%, some powerful lobbies are now trying to delay its implementation in an effort to obtain natural gas without obtaining the regulatory authority.

Historical discussions with various stakeholders revealed that exploration companies had dealt with cash flow problems due to circular debt, so they had welcomed the decision to distribute natural gas to third parties, which could improve the cash flow for new projects.

Sui Northern Gas Pipelines Limited (SNGPL) has persistently requested exploration and production companies (E&P) to limit natural gas production. In response, the producers expressed concerns, saying that periods harm their wells and caused billions of rupees.

At the same time, SNGPL has repeatedly tried to reprogram LNG loads from Qatar. In addition, ENI loads are sold in the open market instead of being launched through the pipeline.

While SNGPL treats indigenous gas as a surplus, consumers in all categories last for serious holidays. This has pushed the market to alternative sources of energy.

The Universal Distribution Company (UGDC), a private sender, stressed that instead of restricting domestic gas supplies, they should be available to private loaders such as UGDC. “This will promote economic activity. It will increase production and help stabilize invoices,” he said.

Performance has declined significantly from 1,230 mmcfd in the financial year 2020-21 to 693 mmcfd in 2025-26, reflecting a 32%reduction. However, the invoice is still calculated on the basis of overall actual performance. The invoice based on the actual reward reward for ineffectiveness and discourages network optimization.

The private sector states that due to declining production and increased costs, capacity fees increased from RS92 per million cubic feet (MCF) in 2019-20 to RS282/MCF in 2025-26-a thrilling 207%increase. This increase is called unjustified, especially because the prices of the end consumer remain constant. This deformation undermines fair pricing.

Private loaders say that the invoice should be calculated on the basis of gross system capacity rather than actual performance and should be determined for at least 10 years. This will force the public use of gas to maximize the use of its network.

Alternatively, a minimum production threshold and a lid with fixed charges should be introduced to avoid any abnormal spike on fixed charges. The rearrangement of the Qatar load should be included in system performance, they say.

Currently, SNGPL is seeking an increase in the transfer invoice, which the private sector is strongly opposed to the financial years 2024-25 and 2025-26. The private sector believes that any increase in the transfer invoice will push them out of the market as they are already operating in a high -risk, competitive environment.

Called the regulator to carry out an in -depth efficiency and performance control of the SNGPL before allowing any invoice review. It also says that the non-registered reference point (UFG), determined by the Oil and Gas Regulatory Authority (OGRA), should be applied to all interested parties.

Private loaders have asked OGRA to participate in a law firm to review the framework governing the implementation of the UFG reference point.

They have also called for the creation of separate accounting systems for transmission, distribution and sales to enhance transparency and efficiency. They have proposed to eliminate the type of refund based on assets, replacing it with a fixed margin for utility businesses.