2003年-世界发展银行全球_Pakistan___Oil_and_Gas_Review_219页_11mb

Pakistan Oil and Gas Sector Review Summary

Core Content

This report provides a comprehensive review of the oil and gas sector in Pakistan, highlighting the progress made in sector reforms, the role of the government and regulatory bodies, and the challenges remaining in the market. It also discusses the economic impact, pricing mechanisms, and the importance of modern fuel access for households.

Main Points

1. Sector Overview

• Historical Context: Until 1999, the oil and gas sector was tightly controlled by the government, with decisions based on political rather than economic considerations.
• Recent Reforms: Since 2000, Pakistan has implemented a pro-market reform program, leading to significant changes in the sector and making it a leader in South Asian reforms.
• Government Role: The government continues to play a major role, including setting tariffs and approving capital expenditure for transmission and distribution (T&D) companies, but its focus is shifting toward policy formulation and regulatory oversight.

2. Natural Gas

• Reserves and Consumption: Pakistan has natural gas reserves of approximately 27 TCF, equivalent to 25 years of current production. Natural gas consumption is growing rapidly.
• Potential Impact: Full utilization of gas resources could reduce fuel oil imports by 4.5 million tons annually, saving about US$650 million.
• Reforms: A new petroleum policy with improved terms for exploration and production, a market-based wellhead pricing framework for the Sui field, and a gas consumer pricing framework have been introduced.
• Challenges: The dual pricing system (prescribed rates and retail tariffs) is problematic, and the government still sets retail tariffs, which may not reflect actual costs.

3. Petroleum Downstream Market

• Import Levels: About 15 million tons of crude oil and petroleum products are imported annually, representing approximately 85% of national consumption.
• Reforms Achieved: Deregulation of fuel oil and diesel prices, fortnightly price revisions based on international markets, rationalization of distributor and retailer margins, improved product specifications, and the phasing out of leaded gasoline.
• Remaining Issues: Protective duties on product imports still benefit refineries, and the freight pool system for road tankers is inefficient. There is also a lack of transparency in import terminals and storage depots, and the market is dominated by a single player with a 60% share.

4. Household Fuel Access

• Energy Use: Most households rely on biomass for energy, which has adverse health and environmental effects.
• Urban vs. Rural: Urban residents prefer natural gas due to its lower effective price, but only 45% of urban and over 80% of all households use it. Rural households, despite having access to biomass, could benefit from switching to kerosene or LPG.
• Recommendations: Expand gas pipelines to urban areas, introduce payment schemes to help poor households connect to natural gas, and promote public awareness about the negative impacts of biomass use.

Key Information

5. Regulatory Framework

• OGRA: The Oil and Gas Regulatory Authority (OGRA) has been established and is gradually becoming operational. It has an advisory role in tariff setting but is expected to take on more responsibility in the future.
• Tariff System: Two pricing systems exist—prescribed rates for T&D companies and retail tariffs set by the government. The difference is the Gas Development Surcharge (GDS), which is retroactively adjusted.

6. Economic Impact

• FDI and Tax Revenue: The oil and gas sector attracts the highest level of foreign direct investment (FDI) and generates significant tax revenue for the government.
• Cost of Subsidies: Annual economic cost of subsidies and foregone taxes is estimated at about Rs. 33 billion.
• Balance of Payments: High imports of crude oil and petroleum products negatively affect the balance of payments.

7. Recommendations

a. Short Term

• Implement a transparent and predictable gas pricing framework from wellhead to retail, aligning tariffs with supply costs.
• Abandon the dual pricing system and allow OGRA to set retail tariffs.
• Maintain price caps for regulated products until effective competition is established.
• Develop transparent mechanisms for calculating price caps, independent of the oil industry.
• Maintain current subsidies for refineries but investigate their long-term benefits.

b. Medium Term

• Promote competition in inland transportation through appropriate policies.
• Introduce a common carrier regime for major infrastructure assets to facilitate entry.
• Strengthen the government's capacity to enforce environmental and safety standards and competition laws.
• Strengthen competition law to ensure fair market practices.

c. Long Term

• Encourage third-party access to the gas network to promote competition.
• Develop a national indicative master plan to identify medium and long-term priorities for gas supply and demand.

Conclusion

The oil and gas sector in Pakistan has undergone significant reforms, improving transparency and efficiency. However, challenges remain in pricing, subsidies, and market structure. The report emphasizes the need for continued reform, including the reduction of government intervention, promotion of competition, and improvement of access to modern fuels for households. These measures are crucial for ensuring the sector's long-term sustainability and economic efficiency.