Oil, Gas and Refinery Sectors - updates

@VCheng sb

Really? Then why does the circular debt still strangle the entire power sector?

The circular debt is a serious one no doubt, but it is a legacy issue. A consequence of long-term thoughtlessness in energy policy. The latest developments which the OP refers to doesn't solve the existing problem but it does ensure that the problem doesn't get worse by continued ill advised policies of the past.

Pak will have to cut down on the power theft and stuff like that to recover some additional revenues to settle some of the old circular debts.

Regards
 
SoulSpokesman said:
@VCheng sb

Really? Then why does the circular debt still strangle the entire power sector?

The circular debt is a serious one no doubt, but it is a legacy issue. A consequence of long-term thoughtlessness in energy policy. The latest developments which the OP refers to doesn't solve the existing problem but it does ensure that the problem doesn't get worse by continued ill advised policies of the past.

Pak will have to cut down on the power theft and stuff like that to recover some additional revenues to settle some of the old circular debts.

Regards
Click to expand...

But that is point: the circular debt has steadily grown worse, and that worsening carries on even today.

A millstone around the neck is also a legacy issue, but it does not help anyone start walking any better.
 
@VCheng sb

The solution is an onetime cleanup of the past debts. It has to come from the central exchequer, it cannot come from anyone else. The GOP needs to find a lender, or sell its SOEs to raise the capital for cleaning up the legacy dues.

Hopefully, with the discoms learning to run their future operations (power procurement and billings/collections) in a prudent, cost reflective manner.

Regards
 
SoulSpokesman said:
@VCheng sb

The solution is an onetime cleanup of the past debts. It has to come from the central exchequer, it cannot come from anyone else. The GOP needs to find a lender, or sell its SOEs to raise the capital for cleaning up the legacy dues.

Hopefully, with the discoms learning to run their future operations (power procurement and billings/collections) in a prudent, cost reflective manner.

Regards
Click to expand...

Oh we know the solutions alright. We just do not want to implement them.
 
@VCheng sb

We just do not want to implement them.

Unfortunately, sir, I have no prescription for that. :(

Regards
 

PM Shehbaz decides against fuel price hike amid global market pressure, says PMO​

  • Development comes amid speculations that govt could increase petroleum prices further tonight
BR Web Des
March 13, 2026

Prime Minister Shehbaz Sharif on Friday decided not to increase petroleum product prices despite a rise in global oil prices, aiming to reduce the financial burden on the public, the Prime Minister’s Office (PMO) said in a statement.

The development comes amid speculations that the government could increase the petroleum prices further tonight.

“No price hike is being made in order to reduce the burden on the common man,” the prime minister was quoted as saying in the PMO statement. “The government will provide as much relief as possible to the people in these difficult circumstances.”

Last week, the government announced a hike of Rs55 per litre in the prices of petrol and diesel in line with increasing international oil prices. The petrol price jumped to Rs321.17 per litre, and the diesel price soared to Rs335.86 per litre.

The international oil prices have increased with the escalating crisis in the Middle East after the United States and Israel launched strikes on Iran, killing its Supreme Leader Ayatollah Ali Khamenei.
 
SoulSpokesman said:
@VCheng sb

Really? Then why does the circular debt still strangle the entire power sector?

The circular debt is a serious one no doubt, but it is a legacy issue. A consequence of long-term thoughtlessness in energy policy. The latest developments which the OP refers to doesn't solve the existing problem but it does ensure that the problem doesn't get worse by continued ill advised policies of the past.

Pak will have to cut down on the power theft and stuff like that to recover some additional revenues to settle some of the old circular debts.

Regards
Click to expand...
Interest on circular debt is more than the actual amount.
 
Von Blumfeld Pai,

Interest on circular debt is more than the actual amount.

There is a moral in that story. If the circular debt had been nipped in the bud, or settled in a timelier manner, the interest on overdue element wouldn't have built up. A stitch in time etc

Regards
 
SoulSpokesman said:
Von Blumfeld Pai,

Interest on circular debt is more than the actual amount.

There is a moral in that story. If the circular debt had been nipped in the bud, or settled in a timelier manner, the interest on overdue element wouldn't have built up. A stitch in time etc

Regards
Click to expand...
True , state is asking soes to let go of the interest and take the actual amount and call it a day ,.but there are so many legal loopholes and soes run to the courts with a booster up their hineys.
 
hydrabadi_arab said:
Pakistan has quietly executed one of the most significant shifts in its energy strategy over the past five years. We should name it for what it is: a success.

Not a partial success. Not a success-in-progress. But a structural achievement that has fundamentally altered the country’s exposure to the two greatest threats to energy security: (1) Strait of Hormuz blockade, and (2) economic coercion via expensive fuel contracts.





The fact that this transformation has gone largely unnoticed in policy circles is itself revealing. Pakistan’s energy system was architected for crisis five years ago. Today, it is architected for resilience. And the mechanism is worth understanding—not because it’s complex, but because it’s instructive.

The Crisis: One-Third of Supply at Risk​

In FY 2020-21, Pakistan’s power system rested on a precarious foundation. Consider the arithmetic:



Total imported fuels: 49.5 TWh (one-third of supply). This was not a stable energy base. A thirty-day blockade of the Strait of Hormuz—through which 90% of global seaborne oil and our LNG cargoes flow, would have cost the system 2.87 TWh, enough to trigger cascading load-shedding of greater than eight hours daily and demand destruction.

“The system was not designed for this risk; it merely accepted it as the cost of energy growth.”

The Shift: Five-Year Transformation​

By FY 2024-25, the arithmetic has fundamentally changed:




How It Happened: Three Pillars​

The transition was not accidental. It resulted from three moving parts that operated in sequence, each enabling the next.

Pillar 1: Nuclear Baseload (Policy-Driven)​

K-2 reactor, commissioned May 2021, added 1,145 MW of capacity. Nuclear generation more than doubled: from 10.9 TWh (FY 2020-21) to 22.5 TWh (FY 2023-24, +106%). This was not marginal. A 1,100 MW baseload plant running at 95% capacity factor produces 9 TWh annually—enough to displace 9 TWh of expensive RLNG.

The mechanism is straightforward: RLNG plants can be throttled back without grid instability when nuclear baseload provides the foundation. K-2 was designed precisely for this. The policy worked.
https://substackcdn.com/image/fetch/$s_!Deq-!,f_auto,q_auto:good,fl_progressive:steep/https://substack-post-media.s3.amazonaws.com/public/images/02d4c859-6e97-459c-b843-8b775fb561ec_1084x266.png

Pillar 2: Coal Stabilization (Structural Recovery)​

This is where the mechanism becomes visible. Pakistan has proven coal reserves of 175 billion tonnes in Thar, Sindh. Yet coal-based generation hovered around 37 TWh for a decade. The issue was not resource availability but dispatch economics.

RLNG was being forced to run (due to take-or-pay contracts with Qatar) even when coal was cheaper:
https://substackcdn.com/image/fetch/$s_!DAXT!,f_auto,q_auto:good,fl_progressive:steep/https://substack-post-media.s3.amazonaws.com/public/images/611f624a-31f1-48db-938a-55601e4535a0_1084x352.png
Pakistan was paying a Rs 12/kWh premium to run expensive imported fuel rather than cheaper coal sitting in the ground.
As RLNG volumes contracted (from 35 to 18 TWh), coal regained its position in merit order. By FY 2024-25, coal generation stabilized at 35.8 TWh. This is not growth—it is durability. The structure shifted; coal became the swing fuel.

Pillar 3: Behind-the-Meter Solar (Market-Driven)​

And here is where the story becomes fascinating. Between 2022 and 2024, Pakistan imported 24-31 GW of solar modules. Only 4 GW went to utility-scale IPPs. The remaining 20-27 GW went onto factory roofs, agricultural fields, and residential terraces.

By mid-2025, Pakistan had accumulated 14-20 GW of BTM solar capacity, generating an estimated 20 TWh annually—generation that never passes through a DISCO meter, never appears in national statistics, yet is entirely indigenous.

The economic mechanism was simple: DISCO tariffs climbed to 30+ Rs/kWh. Payback periods for rooftop solar fell to 3-4 years. Rational actors—factories, farms, middle-class households—responded by investing in solar and exiting the grid. The decentralized revolution was bottom-up, not policy-driven.
https://substackcdn.com/image/fetch/$s_!QkQX!,f_auto,q_auto:good,fl_progressive:steep/https://substack-post-media.s3.amazonaws.com/public/images/96dc9d69-40ad-45f7-85d5-aec313b0eb5a_1084x278.png

The Hidden Crisis: Economic Lock-In Broken​

Behind the geopolitical story lies a deeper economic one. Pakistan signed two long-term contracts with Qatar backed by take-or-pay sovereign guarantees:



Under take-or-pay clauses, Pakistan was obligated to pay for contracted volumes regardless of actual demand. This created a financial trap: even if demand fell (due to economic recession, solar adoption, or cheaper coal), Pakistan was obligated to pay.

The Cost of Forced Running

Annual excess cost (FY 2022-23): Rs 9,408 billion (~$32M USD) in forced RLNG premium vs. optimal coal/gas dispatch.

5-year cumulative economic waste: Rs 37–47 trillion ($125–160B USD). This was a hidden tax on consumers passed through tariffs.

Pakistan was also actively suppressing its own domestic gas:



Petroleum Minister Ali Pervaiz Malik stated it explicitly: “Domestic gas producers are unable to sell gas to the power sector because regasified LNG plants are forced to run to absorb contractual supplies.” This is perverse: Pakistan was starving its own domestic gas sector while being forced to buy expensive imported LNG.

By reducing RLNG from 35 to 18 TWh, Pakistan freed up pipeline capacity for domestic gas and allowed coal to reclaim merit order. The economic stranglehold was released.

The Geopolitical Victory​

Now, consider the blockade scenario. If the Strait of Hormuz were blocked for 30 days today, Pakistan would lose 1.46 TWh of RLNG generation. The policy response would be straightforward
https://substackcdn.com/image/fetch/$s_!8nNC!,f_auto,q_auto:good,fl_progressive:steep/https://substack-post-media.s3.amazonaws.com/public/images/42008cd6-55a1-464d-9a63-fb080e57d6fc_1084x372.png
This is manageable. Five years ago, the same blockade would have cost 2.87 TWh, a crisis-scale event requiring emergency external intervention. The difference is not marginal; it is the difference between a manageable shock and a systemic crisis.

More interesting still: a Strait blockade today would actually unlock economic potential. The power sector could absorb an additional 4-5 TWh of domestic gas without infrastructure expansion. Imported coal imports (currently minimal at 0.5 TWh) could be halted entirely, shifting to full domestic coal capacity. The system would not break; it would reconfigure toward indigenous resources.

This is the architecture of energy security. It is not built on goodwill or geopolitical alignment; it is built on the structure of the energy system itself.

The Total Picture: 147 TWh Indigenous​

When you add grid generation (127.4 TWh) to BTM solar (20 TWh), Pakistan now generates 147.4 TWh of total indigenous power. Only 25 TWh is imported.





Energy independence: 85% (up from 66%). All actual electricity consumption is met by domestic sources: hydropower, nuclear, local coal, wind, solar (utility + BTM), and renewables. Imported fuel dependency has been nearly eliminated except for marginal RLNG/RFO for peak shaving.

The Six Insights You Need​

https://substackcdn.com/image/fetch/$s_!nv2W!,f_auto,q_auto:good,fl_progressive:steep/https://substack-post-media.s3.amazonaws.com/public/images/e6321d7e-cb04-4606-86e8-b2eb9ec77064_1084x1592.png

What Comes Next​

Pakistan has (almost) solved the energy security problem. The remaining agenda is operational efficiency, tariff restructuring, and economic reform:

Renegotiate Contracts

At 18 TWh RLNG (vs 35 TWh baseline), Pakistan is now a marginal buyer, not a strategic asset. Leverage exists for 2026 renegotiation.

Formalize BTM Solar

Bring 20 TWh into official accounting. Enable net metering for BTM, and make buyback price market competitive, rather than rigid, and fixed. Dynamic pricing and time-of-use tariffs required to prevent hidden cross-subsidies.

Two-Part Tariff

Move from a variable-pricing based tariff to a tariff that transparently recovers fixed cost, and sells energy at the margin. This changes the way energy economics work in the country

Five years ago, Pakistan’s energy system was architected for crisis. Expensive imported fuels dominated. Blockade risk was existential. Economic lock-in strangled the economy. Demand was being destroyed by tariff spirals.

Today, it is architected for resilience. Indigenous sources dominate. Blockade risk is halved. Economic trap is broken. Demand can be managed through efficiency, not crisis suppression.

The fact that this success has gone largely unnoticed says something about how policy circles think about energy. We celebrate projects. We debate tariffs. We argue over subsidies. But structural transformation, the kind that rewires the entire system, often happens quietly, in the margins, through the accumulated decisions of millions of actors (nuclear plants, coal miners, solar installers, farmers) responding to incentives.

That is what Pakistan has achieved.
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We'll soon find out about the purported independence
 
is this a bloody joke?

seems, it is so silenced, large scale manufacturing increase has almost died
 
Awesome but I think from this point on government should go all in on coal

And let people deal with solar as all other sources of energy are still relatively expensive.
 
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