Competition Commission Warns of State Dominance in Pakistan’s LNG Sector

Competition Commission Warns of State Dominance in Pakistan’s LNG Sector

 October 5, 2025 

ISLAMABAD: The Competition Commission of Pakistan (CCP) has raised concerns over the monopolistic control of state-owned enterprises (SOEs) in Pakistan’s liquefied natural gas (LNG) sector, pointing out that strict regulations and limited access have discouraged private sector participation.

According to the CCP’s latest research report titled “State of Competition in the LNG Sector in Pakistan”, the country’s LNG market is heavily influenced by government-owned entities, including Pakistan State Oil (PSO), Pakistan LNG Limited (PLL), Sui Southern Gas Company Limited (SSGCL), and Sui Northern Gas Pipelines Limited (SNGPL).

The study — commissioned by the Finance Division and conducted by the CCP Research Department — evaluated the structural, regulatory, and behavioral barriers affecting competition and efficiency in the LNG value chain.

Key Findings

The report highlights several challenges facing the LNG industry, including:

• Limited access to LNG infrastructure, particularly storage and import terminals.

• Slow implementation of third-party access (TPA) rules, which are meant to allow private companies fair use of LNG terminals and pipelines.

• Rising circular debt, which reached Rs2.86 trillion as of January 2024, primarily due to delayed tariff adjustments and diversion of re-gasified LNG (RLNG) to other sectors.

The CCP noted that these issues have resulted in inefficiencies, restricted competition, and placed significant financial strain on the energy sector.

Recommendations for Reform

To improve competition and market access, the CCP proposed a series of reforms aligned with international best practices and the World Bank’s Markets and Competition Policy Assessment Toolkit (MCPAT).

Key recommendations include:

• Establishing a “One-Stop-Shop” for LNG import clearance, managed by a Central Coordination Committee (CCC) to streamline approvals.

• Accelerating TPA rule implementation to open LNG terminals and pipelines for private use.

• Unbundling Sui companies’ operations, separating transmission and distribution to create a level playing field.

• Improving demand forecasting and reducing unaccounted-for-gas (UFG) losses through targeted three-year efficiency plans.

Encouraging Private Participation

Speaking at the report’s launch, CCP Chairman Dr. Kabir Ahmed Sidhu emphasized the importance of market reforms to attract investment and strengthen energy security.

“This research aims to drive policy discussions that promote open access, private sector involvement, and sustainable energy growth,” Dr. Sidhu said.
“Competition is key to unlocking efficiency and innovation in Pakistan’s LNG sector.”

Global Insights

The report also draws lessons from international markets, particularly Japan, highlighting how gradual liberalization, infrastructure unbundling, and transparent market access helped enhance efficiency and competition in their LNG industry.

In summary, the CCP’s findings underscore the need for urgent structural reforms to reduce state dominance, open the market to private investors, and ensure a more sustainable and competitive LNG ecosystem in Pakistan.