Two gas utilities to become five

ISLAMABAD: The government is once again finalising plans to unbundle the country’s two gas utilities into five smaller companies — one transmission company and four provincial distribution firms — on the pattern of the more than 15 ex-Wapda generation, transmission and distribution companies.

The proposed gas sector reforms, including the unbundling of Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL), were discussed on Tuesday at a meeting led by Petroleum Minister Ali Pervaiz Malik on the government side and by World Bank Country Director for Pakistan, Bolormaa Amgaabazar, on the other.

“The reform framework also proposes the restructuring and unbundling of the Sui companies by separating their transmission, distribution and energy businesses, while creating greater opportunities for private sector participation throughout the gas value chain,” an official statement said after the meeting.

Informed sources said some major business groups were interested in the transmission business through privatisation. However, the distribution sector faced serious challenges due to issues such as transfer pricing, cross-subsidies, and uniform national gas prices despite varying levels of system losses — the highest in Balochistan, followed by Khyber Pakhtunkhwa, Sindh, and Punjab.

Govt plans splitting SNGPL, SSGCL into one transmission and four provincial distribution companies

Govt plans splitting SNGPL, SSGCL into one transmission and four provincial distribution companies

Independent consultant KPMG and the Oil and Gas Regulatory Authority (Ogra) had previously opposed the proposed unbundling model on financial and technical viability grounds and suggested broader consultations, including with the provinces and private shareholders. The plan was eventually shelved in 2020.

The sources said the Petroleum Division now wanted to fast-track the restructuring and unbundling process and secure the prime minister’s........

© Dawn Business