ISLAMABAD - A seminar on gas reforms was organised by Research and Advocacy for the Advancement of Allied Reforms (RAFTAAR) in collaboration with Sustainable Development Policy Institute (SDPI) here on Thursday.

The seminar brought together the key players in the gas industry, including government, donors, regulators, producers, industry and academia. The purpose of the seminar was to explore corrective measures to governance issues that have led to the persistent gas shortages in Pakistan.

Pakistan has 15 years of natural gas reserves left. There have been no significant discoveries of deposits in the past 17 years that could alleviate the rapid depletion rate. Gulfaraz Ahmad, former secretary Ministry of Petroleum and Natural Resources, said, “Pakistan is the world’s third largest natural gas economy in the world. Because natural gas is a clean fuel therefore our use of it has significantly reduced what could have been extraordinary rates of pollution if we had used alternatives.” Currently, of all energy sources in the country, natural gas accounts for 41% of use.

Pakistani consumers receive an economic benefit in the form of natural gas because it is cheaper than alternative forms of fuel. If alternates to natural gas have to be imported, Pakistani households will have less to spend on health, education and other items as they will have to allocate more to energy spending. The insufficiency of gas supply has severely constrained industry that, like textiles, manufacturing, cement and fertilizer, rely heavily on natural gas.

Jam Kamal Khan, State Minister for Petroleum and Natural Resources said, “We have to appreciate the gift of natural gas given to us by nature, whose conservation and supply will only become even more important over time as we consume more of it.” The minister also commented on the high losses of gas in the system and from theft, currently it is 10-12%, which is much higher than international acceptable losses of 2%. He also explained why the government was making LPG supply agreements with Qatar.

Dr Salman Shah, former finance minister and the lead of the panel of economists for RAFTAAR, noted, “The cost to Pakistan of running the existing regulatory system has been high; it has resulted in shortages. With supply anticipated to be cheaper in the coming decade, Pakistan can deregulate.”

The meeting discussed the political economy challenges in optimal pricing and allocation in gas sector, particularly in light of data from RAFTAAR’s research. The sector’s regulatory environment as well as the relationship between the Oil and Gas Development Authority (OGRA) and relevant ministries and their departments was also discussed.