The Government of Pakistan has reviewed a comprehensive roadmap aimed at transforming the country’s gas sector into a more competitive, open and efficient market, with technical support from the World Bank. The proposed reforms are designed to reshape the structure of the gas market, strengthen regulatory oversight, reduce market distortions and create greater opportunities for private sector participation across the energy value chain.
Federal Minister for Petroleum Ali Pervaiz Malik chaired a high level meeting at the Petroleum Division with World Bank Country Director for Pakistan Bolormaa Amgaabazar and her delegation to examine the reform roadmap. Representatives from Sui Northern Gas Pipelines Limited, Sui Southern Gas Company Limited and the Oil and Gas Regulatory Authority also participated in the meeting, according to a press release issued by the Petroleum Division.
The roadmap has been developed by the Petroleum Division with technical assistance from the World Bank and draws on international practices for developing competitive gas markets. The initiative forms part of the government’s wider energy sector reform agenda, particularly its efforts to advance deregulation across different fuel segments while establishing the regulatory and institutional structures required to support the market after deregulation.
Welcoming the World Bank delegation, Ali Pervaiz Malik acknowledged the institution’s continued partnership and technical support for Pakistan’s energy sector reforms. He particularly highlighted the World Bank’s assistance in deregulation initiatives and recognized the contribution of the two Sui companies in developing the reform framework.
The Petroleum Minister emphasized that deregulation would need to be accompanied by a strong post deregulation structure. According to the minister, the future regulatory framework should promote transparency and efficiency while ensuring long term sustainability within the gas market. The framework is also expected to encourage competition and protect consumers while maintaining the commercial viability of the sector.
A major element of the proposed reforms involves restructuring the existing subsidy system. The government believes the current structure needs to be overhauled to ensure that financial support is more targeted and that the protected customer category is redefined. The reform process is also intended to reduce distortions within the gas market, with the eventual objective of moving towards a single market clearing price.
Participants at the meeting endorsed the overall strategic direction of the reform programme, which is designed to establish a competitive gas market supported by effective regulation and continuous market monitoring. Under the proposed structure, the Oil and Gas Regulatory Authority would assume a stronger role in ensuring fair competition and providing oversight of market participants.
The framework also calls for restructuring and unbundling the Sui gas companies. Under the proposal, their transmission and distribution operations would be separated from their energy businesses. This restructuring is intended to create a clearer market structure while allowing greater participation from private companies across different segments of the gas value chain.
The proposed transformation could have implications beyond the gas distribution companies themselves. The meeting was briefed that the reform programme is expected to strengthen Pakistan’s energy security, reduce the burden created by cross subsidies and introduce fairer and more transparent pricing for industrial consumers. It is also expected to support greater private sector participation and improve the financial sustainability of the Sui companies.
The government also expects the reforms to create opportunities for fresh investment and employment across several areas of the energy industry. These include exploration and production, oil marketing, gas trading and intermediary activities. Greater participation across these segments could broaden the structure of Pakistan’s gas market and provide new avenues for investment.
The reform package consists of several components intended to support the transition. These include a comprehensive Gas Market Evolution Plan, an investment roadmap, a sector financial model, detailed legal and regulatory assessments and a dedicated capacity building programme for the Oil and Gas Regulatory Authority.
The capacity building component is intended to strengthen the institutional capabilities of the regulator so that it can operate effectively as an independent authority overseeing a competitive gas market. Strengthening regulatory capacity is considered an important part of the proposed transition as the government moves towards a more open market structure.
Ali Pervaiz Malik directed officials to finalize the roadmap and prepare it for approval by Prime Minister Shehbaz Sharif by the end of August 2026. Following approval, the Petroleum Division is expected to begin phased implementation of the reform programme in consultation with relevant stakeholders.
The government has said that the phased approach is intended to support a smooth and sustainable transition while allowing stakeholders to participate in the implementation process. The broader objective is to establish a modern and financially viable gas sector capable of supporting energy security, improved governance and investment.
The proposed gas market reforms represent a significant structural shift in Pakistan’s energy policy, with the government seeking to move away from existing market distortions towards a system based on greater competition, stronger oversight and more commercially sustainable operations. The World Bank’s technical support is expected to continue playing a role as Pakistan prepares the roadmap for implementation and works towards reshaping the gas sector.
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