Pakistan finalizes World Bank-backed roadmap for gas sector deregulation

Pakistan's Petroleum Division has finalized a roadmap to deregulate the country's gas sector with technical support from the World Bank.

Federal Minister for Petroleum Ali Pervaiz Malik reviewed the plan with World Bank Country Director Bolormaa Amgaabazar, aiming to build a more competitive and financially sustainable energy market.

What does Pakistan's gas sector deregulation roadmap involve?

The roadmap draws on international best practices to guide Pakistan's transition towards an open, competitive gas market. It proposes restructuring the Sui gas companies by separating transmission, distribution and energy businesses, while creating room for greater private sector participation across the gas value chain.

Malik welcomed the World Bank delegation and appreciated its continued technical support for Pakistan's energy sector reforms, particularly in advancing deregulation across fuel segments. He also acknowledged the role of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) in developing the reform framework.

Malik said deregulation must be paired with a strong regulatory framework to ensure transparency, efficiency and long-term sustainability. He said the future market structure should encourage competition, improve operational efficiency, protect consumers and support a commercially viable gas sector.

What changes are planned for gas subsidies and pricing?

Malik called for redesigning the existing subsidy regime to provide more targeted support and redefine the protected consumer category. He said this would help reduce market distortions and move Pakistan eventually towards a single market-clearing gas price.

Participants at the meeting endorsed the overall direction of the reform programme, which envisages a competitive gas market backed by stronger regulation and oversight. Under the proposal, the Oil and Gas Regulatory Authority (OGRA) would take on an enhanced role in promoting fair competition and supervising the market.

What benefits does the government expect from the reforms?

Officials reviewed the expected benefits of the reforms during the meeting. These include stronger energy security, lower cross-subsidy burdens, more transparent pricing for industrial consumers and increased private investment.

The reforms are also expected to improve the financial sustainability of the Sui companies and create new investment and employment opportunities in exploration and production, oil marketing, gas trading and related services. The reform package includes a Gas Market Evolution Plan, an investment roadmap, a sector-wide financial model, legal and regulatory assessments, and a capacity-building program to strengthen OGRA's role as an independent regulator.

When will the gas deregulation roadmap be implemented?

Malik directed officials to finalize the roadmap for submission to Prime Minister Shehbaz Sharif by the end of August. Following the prime minister's approval, the Petroleum Division will begin phased implementation of the reforms in consultation with stakeholders. Representatives from SNGPL, SSGCL and OGRA also attended the meeting.

Malik reaffirmed the government's commitment to implementing the reforms to strengthen energy security, improve governance, attract private investment and support long-term economic growth.