Govt plans deregulation, unbundling of Sui companies
- Proposed reforms seek to establish more competitive gas market, with OGRA given stronger role in market regulation, competition oversight and monitoring
Pakistan, with World Bank support, plans to deregulate its gas sector, restructure Sui companies, and establish a single market-clearing price to enhance competition and reduce distortions.
- Restructuring Sui companies' operations
- Redesigning gas subsidy structures
- Opportunities for private sector investment
The government plans to deregulate Pakistan’s gas sector, restructure and unbundle the Sui companies, and gradually move towards a single market-clearing price under a reform roadmap being prepared with World Bank technical support, the ministry said in a press release.
The roadmap, reviewed by Federal Minister for Petroleum Ali Pervaiz Malik and World Bank Country Director Bolormaa Amgaabazar on Tuesday, proposes separating the transmission, distribution and energy businesses of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL).
The proposed reforms seek to establish a more competitive gas market, with the Oil and Gas Regulatory Authority (OGRA) given a stronger role in market regulation, competition oversight and monitoring.
The Petroleum Division said the reform framework also calls for redesigning the existing gas subsidy structure, redefining the protected customer category and reducing market distortions as the government moves towards a single market-clearing price.
The roadmap aims to reduce the cross-subsidy burden and introduce fairer and more transparent pricing, particularly for industrial consumers, while creating greater opportunities for private-sector participation across the gas value chain.
According to the reform plan, restructuring the Sui companies would support their financial sustainability while opening opportunities for private investment in exploration and production, oil marketing, gas trading and intermediary businesses.
The proposed reform package includes a Gas Market Evolution Plan, an investment roadmap, a sector-wide financial model, legal and regulatory assessments, and a capacity-building programme for OGRA.
The Petroleum Division is expected to finalize the roadmap for submission to Prime Minister Shehbaz Sharif by the end of August. Subject to the prime minister’s approval, the reforms will be implemented in phases in consultation with relevant stakeholders.
Representatives of SNGPL, SSGCL and OGRA also attended the meeting.
Comments