ISLAMABAD: Ishaq Dar, Chairman of the high-level committee on oil and gas, has rejected the Petroleum Division‘s proposed framework for allocating discovered gas to third parties. Emphasizing that the government will not alter a policy already approved by the Council of Common Interests (CCI), Dar instructed the Petroleum Division to submit a revised draft within 15 days.
The Petroleum Division had presented four proposals, including applying the allocation policy to depleting fields, excluding existing fields, implementing the policy for new discoveries, and gradually increasing the allocation to third parties to 35% by 2031. However, Dar dismissed these proposals, insisting that the government’s approach must align with the original CCI decision made under the previous caretaker setup.
Amidst concerns over the lack of progress in energy policies, escalating circular debt, and investor uncertainty, Dar’s decision highlights the ongoing challenges in the oil and gas sector. Exploration and production (E&P) companies, which have pledged a $5 billion investment contingent on favorable policy amendments, have expressed hesitation due to the uncertainty surrounding gas allocation policies.
The meeting also addressed the reduction in gas supplies to public utilities, the hiring of a consultant to resolve pipeline pressure issues, and the potential revision of the gas price mechanism to ensure more frequent adjustments, thereby stabilizing revenue for gas utilities.
Story by Zafar Bhutta
