Pakistan requires 'consensus' on gas situation, subsidies, says PM Imran

ISLAMABAD: Pakistan required a "national consensus" on the continued gas situation, also because the subsidies that were fuelling a circular debt crisis, Prime Minister Imran Khan said Wednesday.

Speaking at a seminar on 'Sustainability, Security and Affordability of gas Supply in Pakistan' organised by Petroleum Division, PM Imran stressed on how if the country had debated on which fuel to use to supply electricity, "we would haven't faced such crisis".

"Only 27% Pakistanis use gas supplied via pipeline and therefore the rest use LPG [liquefied petroleum gas] cylinders, which i exploit also . the value of LPG is 4% above the gas supplied through pipeline.

"This is utter distortion," he said. "Subsidies are given to people that lack basic necessities or to remote areas that don't have adequate facilitation.

"That is how wealth is made — ultimately contributing to per capita income and GDP and, in our case, we will return the debts that we've since ages," he added, noting that a review of relevant documents made him realise how, in Pakistan, "subsidies are given to people that don't even deserve them".

'Still not sure' about more gas reserves

Expressing gratitude to the independent power producers (IPPs) for meeting the govt to barter on contracts, the prime minister said it had been vital to debate where Pakistan was heading.

"To date, we were counting on indigenous gas, the reserves of which are depleted now. we actually got to believe it, especially when winter is round the corner and there's usually a shortage of gas supply," he said.

"First of all, we'd like to debate while keeping a hawk’s eye on the event of the country. it's also impossible that a province progresses and therefore the country’s economy fails.

"We are assuming that there are gas reserves and that we can extract gas but we are still unsure about it," he said.

"This debate is vital for us due to the gas situation" in Pakistan since winters bring shortages per annum , he explained, warning that the challenge would likely become a "bigger problem next winters".

"We're counting on imported gas" — which is costlier — "and that compounds the circular debt within the gas sector", PM Imran added.

With imported gas costing Rs17 a unit, selling it for Rs14 a unit creates a niche worth Rs3 a unit, which results in the worsening situation Pakistan is in, he said.

"We hope for a consensus," he said. "Khyber Pakhtunkhwa has spoken of its interests but, eventually, the national interest must be promoted too," he added.

"We know that it’s quite expensive process but i'm expecting that we will build a national consensus while bringing all provinces board."