The government is finalising structural reforms in the petroleum sector to ease financial distress, focusing on renegotiating LNG contracts, reducing excessive port charges, settling circular debt, and improving domestic gas tariff efficiency. The 5th meeting of the Committee on implementation of these reforms was held on August 18, 2025, chaired by Petroleum Minister Ali Pervaiz Malik at the Army Air Defence Headquarters in Rawalpindi.
During the session, the Sub-Committee on LNG presented comparisons between imported coal and RLNG, highlighting the potential of cheaper LNG usage to reduce national-level losses. Officials discussed ways to consume surplus RLNG by rationalising prices, while emphasising that even under Qatar contracts, Pakistan remains obligated to take four cargoes annually for the next five years. The Petroleum Minister stressed balancing affordability with foreign exchange savings while protecting long-term relations with Qatar.
The Sub-Committee on Circular Debt shared a settlement plan, noting receivables of over Rs 2 trillion in the gas sector. The plan proposed revenue streams such as reducing excess LNG cargoes, imposing a petroleum levy, recovering receivables from the power sector, and using dividends from state-owned companies. Officials recommended ringfencing these collections exclusively for circular debt repayment to ensure transparency and discipline in financial management.
Meanwhile, the Sub-Committee on LNG Tariff Rationalisation flagged excessive port charges as a major contributor to higher LNG costs. It revealed that Port Qasim Authority charges $550,000 per cargo, far higher than regional benchmarks in the UAE and Bangladesh. The committee decided to invite PQA officials for discussions to rationalise charges, while also reviewing margins given to PSO and PLL to identify areas for cost reduction.
The Sub-Committee on Domestic Gas Tariff Efficiency updated the meeting on reforms to improve pricing methods. OGRA informed that a study on Return on Asset (RoA) models has been initiated with KPMG, aimed at exploring global alternatives that promote transparency, competition, and fair consumer pricing. The Petroleum Minister urged OGRA to accelerate work on tariff reforms, stressing the importance of separating transmission and distribution operations from fuel businesses for efficiency gains.
Concluding the meeting, Minister Ali Pervaiz Malik emphasised the urgent need to finalise all recommendations on LNG pricing, circular debt, tariffs, and port charges. Sub-committees were tasked to submit their final reports to the Cabinet Division by August 25, 2025, while a consolidated draft report will be presented to the Prime Minister by August 30, ensuring timely decisions to stabilise the petroleum sector.