Pakistan Institute of Development Economics

Webinars Brief 17:2020
The Gas System In Pakistan
Publication Year : 2020

Single independent regulator for all gas system activities_ upstream, midstream and downstream. No more government interference. In the guaranteed rate of return formula, there is an incentive to expand pipelines, while there is no incentive for maintaining the existing ones. There is a need to shift from the guaranteed return to efficiency-based returns. It is the job of the regulator to come up with the new mechanism. Consumer tariff should be on the cost of service basis for an efficient gas sector. A direct subsidy is a more effective tool_ there is an option of BISP for life-line consumers and export promotion programmes for the industry. OGRA has to take lead to make some structural changes in the system. Before unbundling we as a nation must agree on how to manage energy systems. Our political economy needs to be educated by our technocrats. There has to be a will & capacity to implement what is suggested by the technocrats.