HE extension of captive levy already imposed on the industrial customers of the two public sector utilities under the IMF funding programme to third-party suppliers must end policy distortion and migration of captive power producers away from the Sui companies. But this will not resolve the gas sector`s bigger issue of mounting circular debt amid a glut caused by long-term LNG import agreements and dwindling demand due to high fuel prices. The `oversupply` of gas in the SNGPL system has forced the utility to defer the import of over 170 LNG cargoes and order local gas producers to either shut down their fields or scale down production. But these are merely temporary solutions, which will only push a deeper crisis to a later date. Meanwhile, these actions will impose substantial costs on local producers, such as the stateowned OGDCL, and lead to unannounced supply suspensions for customers all to reduce its financial losses.

The gas crisis was waiting to happen for several years. The problems a supply glut, reduced demand, rising thef t and system losses, soaring consumer prices are not any different from the ones confronting the power sector. Warnings of a build-up of circular sector debt, due to the widening mismatch between the increasing costs of delivering gas to consumers and production, as well as SNGPL`s inability to recover the full cost of expensive imported LNG were being sounded for over 10 years. Yet, nothing was done to address the issue. To effectively tackle the gas sector circular debt and associated issues, the government should, among other things, implement the WACOG law to ensure a balanced pricing mechanism reflecting the true cost of gas, including RLNG, eliminate cross subsidies distorting the market and privatise the Sui companies monopolising the sector. Increasing gas prices and levying punishing taxes on consumers will do nothing. This policy has failed to deliver in the power sector, and will not succeed in the gas sector either.