Pakistan’s oil and gas sector is facing a major financial crisis, with companies owing the federal government billions in unpaid dues. Prime Minister Shehbaz Sharif has taken notice of the situation, instructing the Petroleum Division to take immediate steps to recover the outstanding amounts.
As of last year, over PKR 44.39 billion in royalties is owed by various companies. Key defaulters include:
PEL: PKR 1.16 billion
OGDCL: PKR 26 billion
United Energy: PKR 9 billion
Orient Pakistan: PKR 870 million
The Petroleum Division attributes delays in payments to the country’s circular debt and a severe shortage of U.S. dollars.
This long-standing issue has forced the government to impose additional taxes in the past to avoid international default on oil and gas payments. The Economic Coordination Committee (ECC) is now considering price adjustments on a more frequent basis to tackle market fluctuations.
The crisis underscores the urgent need for reforms in the oil and gas sector to ensure timely payments and prevent future financial instability.
