By SKM
February 25, 2026
ISLAMABAD: Federal Minister for Petroleum Ali Pervaiz Malik said the government has halted the rise of circular debt in Pakistan’s gas sector, highlighting reforms aimed at creating a more efficient and sustainable energy system. He made the remarks at the Pakistan Governance Forum, organized by the Ministry of Planning, Development and Special Initiatives.
The Minister described the energy sector as “as critical for the economy as oxygen is for the human body” and outlined a comprehensive roadmap for energy sector reforms under the leadership of Prime Minister Shehbaz Sharif.
Key initiatives include the revival of the Cabinet Committee on Energy, chaired by the Prime Minister, and a holistic planning exercise conducted with international consultants Wood Mackenzie, integrating all energy sources with the Power Division’s Integrated Generation Capacity Expansion Plan (IGCEP). Malik also noted ongoing efforts to make the Integrated Energy Secretariat permanent to ensure better coordination and long-term planning.
On circular debt, the Minister said the gas sector’s principal debt, which had reached approximately PKR 1,831 billion by June 2025, fell to PKR 1,816 billion by September 2025 without any additional budgetary support. He emphasized that reported increases largely reflect accumulated interest and late payment surcharges (LPS), and a comprehensive liquidation plan is being presented to the Prime Minister.
Further governance and policy reforms include an independent Unaccounted-for Gas (UFG) study to tighten allowance criteria, updates to petroleum policies, and the announcement of a new Tight Gas Policy to enhance energy security. A shale pilot project is underway in Hyderabad, and the Directorate General of Petroleum Concessions (DGPC) is being restructured with guidance from the World Bank.
The Minister highlighted growing foreign investment interest in Pakistan’s energy sector, noting that Turkish Petroleum is opening an Islamabad office, SOCAR recently sent a delegation, and Kuwait Foreign Petroleum Exploration Company (KUFPEC) is expected to visit soon.
Malik reaffirmed the government’s commitment to greater deregulation in the gas sector to allow market forces to improve efficiency, operational performance, and private sector participation. He acknowledged that much work remains but said the “critical first steps” have been taken to stabilize the sector and lay the foundation for long-term growth.
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