Honourable Prime Minister of Pakistan @PakPMO, Pakistan’s rapid energy transition has moved ahead of its policy framework. Industrial baseload in (especially in Gas Sector) is being forced to carry the cost of seasonal cooling and heating peaks. That is not reform; it is economic amputation. It is like sacrificing a healthy limb to reduce body fat. Sir, the real fat lies in underutilized capacity payments, planning and governance failures, the Sui return-on-asset business model, cross-subsidies, bureaucratic inefficiencies, high UFG, RLNG diversion and actualisation distortions, circular debt, weak cost causation and distorted price signals. Reform should remove these structural inefficiencies, not transfer their cost to productive industry. Solar has become Pakistan’s single largest source of electricity, contributing around 35% of total generation. Cumulative solar PV module imports have reached nearly 60 GW, of which an estimated 50 GW is installed, generating around 54 TWh annually. @jackprandelli, the original map required correction, which I have updated. Solarisation has reduced daytime grid demand, but it has not removed fixed capacity costs or the evening peak. With nearly 73% of power-system costs fixed, these costs are now being recovered from fewer grid units, increasing the burden on remaining consumers. The deeper issue is cost causation. LNG cargoes imported to meet evening and midnight residential cooling load should not be socialised into industrial tariffs without dispatch data, cargo-wise reconciliation and sector-wise cost-causation review. Under Pakistan’s pooled power-generation system, the cost of hydropower, nuclear, coal, indigenous gas, RLNG and other sources is blended into the Energy Purchase Price and fuel-cost adjustments. This hides who created the cost and who ultimately pays for it. Industry then carries a double burden. On the gas side, industrial captive consumers face high captive-gas tariffs with over PKR 1,800/MMBtu embedded cross-subsidy, blended recovery of indigenous gas and RLNG costs, and the punitive Off-Grid Captive Levy. The effective delivered gas price can change with the allocation mix between indigenous gas and RLNG, weakening tariff transparency and OGRA tariff finality. On the power side, if industry is pushed onto the grid, it also pays capacity charges and pooled imported-fuel costs, including RLNG used for evening and late-night cooling demand that industry did not create. In effect, productive industry is being made to absorb stranded costs in both the gas and power sectors. Pakistan needs competitive gas markets, removal of cross-subsidies from industrial gas tariffs, and a grid that wins industrial demand through affordability and reliability, not coercion. @akleghari @AliPervaiz450 @Financegovpk @MIshaqDar50 @betterpakistan @sifcpakistan @jam_kamal @Gohar_Ejaz1 @BilalAKayani @Rashidlangrial @81ShahbazRana @SkmMustafa @KhaleeqKiani @APTMAofficial @AptmaUncut @FPCCIOfficial @MusadaqZ @shahzadsaleem @mukhtarkhurram @nadeemhaque @AliKhizar @Asad_Ashah @nadeemhaque @rehanjawed

1. The main problem in Pakistan’s gas sector is that price no longer reflects cost, and allocation no longer follows economic value. This is the root of the sector’s economic distortion and a core regulatory concern that OGRA is duty-bound to address. Gas is a scarce economic resource. It should flow toward its most productive, efficient and high-value uses, but the present system allocates it through administrative pricing, priority lists, load-management policies and utility discretion. 2. As a result, the cart is placed before the horse. Supply decisions are made first, while cost causation, payment responsibility and economic efficiency are addressed later. Instead of price guiding allocation, allocation is decided administratively and the cost is then spread across consumers through tariffs, subsidies, cross-subsidies and blended pricing. This weakens regulatory accountability and turns gas pricing into a recovery exercise rather than a transparent economic signal. see this centerforenergystudies.com/p… 3. The consequence is a distorted market in which efficient and paying consumers can be burdened with costs they did not cause, while lower-value or politically protected consumption remains insulated from its true cost. This breaks the basic regulatory principle that every cost must have a cause and every tariff must be transparent, fair and defensible. 4. At the utility level, OGRA determines the revenue requirement of SNGPL and SSGC through a regulated cost-of-service and rate-of-return framework. This means OGRA assesses gas cost, network cost, depreciation, UFG, approved investment and allowed return. But at the consumer level, the Federal Government allocates this cost through administratively differentiated sale prices, subsidies and cross-subsidies. This separation between cost determination and price allocation is where the distortion begins. 5. The result is that gas becomes a political commodity rather than an economic resource. Instead of being priced according to marginal cost, scarcity value, payment discipline, efficiency and economic output, it is priced and allocated through policy discretion. Some consumers pay below cost, while others, especially industrial consumers, are loaded with costs they did not cause. This weakens cost causation and turns tariff design into an exercise in political balancing rather than economic regulation. 6. The blended industrial tariff shows the problem most clearly. OGRA may determine the prescribed price, but when a gas utility applies a notional RLNG blend through billing practice, the effective payable tariff is shaped by the utility’s internal allocation decision. This undermines OGRA’s tariff finality. A transporter or utility should not be able to reset the consumer’s payable tariff outside the lawful regulatory determination process. 7. If industry receives indigenous gas, it should pay the indigenous gas price plus transparent network charges. If it receives RLNG, the utility must prove actual RLNG allocation through reconciled volumes, metering data, sector-wise offtake and cargo-wise cost attribution. Physical commingling in the pipeline cannot become a blank cheque for economic averaging. No blended tariff should be charged without allocation proof, cost causation and an OGRA-approved methodology. 8. The Federal Government’s gas load-management policy further deepens the distortion. Once utilities are allowed to manage supply by category, region and priority, actual allocation again depends on the discretion of SNGPL and SSGC. For industrial consumers, this creates a moving target: they cannot know with certainty what gas they are receiving, what blend they will be billed for, or whether the price reflects actual supply. 9. This is not a functioning market. It is a distorted arrangement in which costs are obscured, cross-subsidies become embedded, efficient consumers subsidise inefficient consumption, utilities remain incentivised to expand regulated assets, and tariff shortfalls accumulate as circular debt. The system is not failing because of one LNG contract, one UFG dispute or one billing issue. It is failing because market design has broken the link between cost, price, allocation and accountability. 10. Pakistan’s gas sector is not governed by a clean cost-reflective pricing framework. It combines regulated cost recovery at the utility level, political price allocation at the consumer level, and discretionary supply management by gas utilities. This hybrid structure weakens efficiency incentives, distorts price signals, undermines regulatory tariff finality, breaks the link between cost and causation, and turns gas-sector circular debt into a structural outcome rather than an accidental shortfall. 11. Gas market liberalization is therefore not an ideological choice; it is the necessary correction to a distorted market design. a) Pakistan must move from bundled monopoly control to open access, from political allocation to cost-causative pricing, and from hidden cross-subsidies to transparent, targeted support. b) Pipelines should operate as neutral common-carrier infrastructure, gas sales should be separated from transportation, and qualified consumers should be allowed to contract directly with E&P companies, private LNG suppliers and licensed shippers under a transparent Use of System Charges regime. c) This would improve price discovery, reduce reliance on the Sui utilities as monopoly suppliers, unlock indigenous gas for productive industry, attract private investment, strengthen payment discipline and reduce circular debt pressure. The objective is simple: gas should flow to the consumers who value it, pay for it, and use it most efficiently.