ISLAMABAD: As a demand-side intervention, the government is cautiously considering lifting the ban on new gas connections to ease pressure from a persistent surplus in the gas supply chain that threatens the integrity of pipeline infrastructure and risks breaching sovereign international commitments.

Informed sources said the Ministry of Finance recently proposed revisiting the moratorium as a potential solution to manage surplus liquefied natural gas (LNG), which is also placing additional strain on foreign exchange reserves due to higher import costs.

Currently, more than 3.5 million applications for new gas connections are pending with Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL). While granting new connections allows gas utilities to claim a guaranteed return on fixed assets such as pipelines and related infrastructure, it also exacerbates gas losses, lowers revenue recovery, and deepens winter shortages.

The moratorium, originally imposed in 2009, was partially lifted after six years but reimposed in 2022 amid rising gas shortfalls.

Even with existing consumers, particularly in Punjab and Khyber Pakhtunkhwa, SNGPL faces severe winter shortages. The diversion of expensive........

© Dawn Business