At a time when 78 percent of households in Pakistan do not have access to natural gas.
While its exploration and production has also decrease in the country.
According to the report, OGDCL predicts that Pakistan’s domestic oil reserves will exhaust by 2025.
The revolving debt in the gas sector exceeds 15 trillion rupees. Allocation and monopolistic business practices are barriers.
These observations make by the Pakistan Institute of Development Economics (PIDE) in its latest research brief on ‘Pakistan’s gas crisis’.
It states that gas is the third largest source of energy use worldwide, but Pakistan’s share of global gas consumption is less than one percent.
It meets its energy demand through imported and indigenous resources in the ratio of 44:56.
Natural gas and imported LNG contribute more than 40 percent of the country’s current energy mix, including gas resources use in power generation.
Gas demand in Pakistan is increasing rapidly in recent years. But gas exploration and production declines and the LNG operational and regulatory framework is weak. That leads to nationwide shortages and supply costs
According to a press release issue by PIDE, 15 gas exploration and production companies work in 55 fields spread across the country.
Gas distribution and transmission are mainly owned and operate by two state-owned companies. One is Sui Northern Gas Pipelines (SNGPL) and the other is Sui Southern Gas Company (SSGCL).
Pakistan lacks competition in gas exploration/production industry and gas distribution/transmission industry.
The study says that OGDCL predicts that Pakistan’s domestic oil reserves will deplete by 2025. However, if demand for gas is limited to current levels by 2030, current reserves will be higher. These will remain for more than 15 years’.
PIDE research shows that 78 percent of households in Pakistan do not have access to natural gas. Even though natural gas consumption in the domestic sector increases by about 11 percent over the years.
Supplying gas to these households requires significant investment as the cost of supplying gas to households is much higher than the cost of supplying gas to industry or the power sector.
In addition, gas allocation policy drives by political preferences rather than the objective of maximum value addition, with low gas prices and inefficient gas allocation encouraging high demand.
With 30.6 billion cubic meters of natural gas, Pakistan accounts for 0.8% of global gas production. The demand for gas in Pakistan is increasing rapidly but due to ineffective distribution, the country is facing severe shortage of gas.
The brief states that large areas of the country remain un-explore due to security concerns and law and order situation.
For example, the Pishin Basin of Balochistan is consider a valuable block. However, due to law and order issues, no gas exploration activities conducted in this basin.