Senate Standing Committee on Petroleum, chaired by Senator Omar Farooq, convened at the Pakistan State Oil (PSO) headquarters on Thursday to address the pressing challenges facing the energy sector. The focus of the meeting was the proposal by PSO to delegate regulatory powers to its Board of Management (BoM) in order to create a level playing field amid increasing competition and financial losses.
The committee received a detailed briefing from senior officials of PSO, Sui Southern Gas Company (SSGC), and Pakistan Petroleum Limited (PPL). Senator Omar Farooq emphasized the importance of tackling the challenges in the energy sector and ensuring strategic collaboration among key public sector institutions. Managing Director PSO, Syed Muhammad Taha, highlighted the company’s significant role in the energy sector since the 2000s. He shared details regarding PSO’s market share, which stabilized at 50-52% in 2022 due to comprehensive efforts to maintain dominance in the liquid fuel market, after a notable decline. He stressed, however, that PSO has been at the forefront of providing unconditional support to the government during the energy crisis. “PSO has been the largest buyer of furnace oil for power plants and currently is the top buyer of LNG in the country for forward sales to SNGPL,” he noted.
“This strategic role has, however, created a massive burden of circular debt, diminishing profits and restricting growth.” Furthermore, he explained that PSO’s circular debt equals 14% of its EBITDA for the fiscal year 2023, underscoring the severity of this issue. He also discussed various detailed challenges, including trapped equity, price competition, stagnant investment, discount dumping, and franchise exploitation.
In-depth discussions also unfolded regarding regulatory challenges, with PSO’s MD advocating for the empowerment of its Board of Management to gain full commercial autonomy. He emphasized, “Empowering the Board with regulatory authority is crucial to ensure PSO’s sustainability and its ability to compete effectively in an increasingly challenging market.” Members of the Senate committee, including Senators Qurat-ul-Ain Muri, Saadia Abbasi, Rana Mahmood-ul-Hassan, and Raja Nasser Abbas, actively participated in the discussions, reinforcing the need for robust policy measures to address energy challenges.
Senator Qurat-ul-Ain Muri remarked, “The energy sector is the backbone of our economy, and we need to ensure that our policies are not only sustainable but also enable public sector institutions to thrive in a competitive environment.” SSGC’s Acting Managing Director, Muhammad Amin Rajput, provided updates on the company’s gas supply reductions for captive power generation starting January 2025 and its impact on the industrial sector.
He compared gas delivery and distribution trends for Sindh and Balochistan provinces in 2024 and 2025. He stated, “We are closely monitoring the negative impacts of reductions in gas supply to industries.” “To effectively address this challenge, collaborative efforts with stakeholders are essential.”
Senator Omar Farooq concluded the session by underlining the importance of collaboration between public sector institutions and the government. “This meeting highlights critical issues in the energy sector. We are committed to taking decisive actions to ensure the stability and development of our energy infrastructure,” he said.
He added, “Immediate attention is required for the challenges faced by PSO, SSGC, and PPL. This committee is united in its resolve to find sustainable solutions for the energy sector.” The Senate’s Standing Committee on Petroleum pledged to follow up on recommendations and address emerging challenges in future meetings.
