Page 84 - CMA Journal (Mar-Apr 2026)

SECTOR INSIGHTS

By: ICMA Research and Publications Department
Fossil Fuel Imports (Oil & LNG) Industry

Overview: overall productivity. Recognizing these challenges, the
Pakistan’s energy mix comprises fossil fuels (oil, gas, and Government of Pakistan has implemented structural
coal), nuclear power, and renewable sources such as reforms and policy frameworks to enhance sector e ciency,
hydropower, wind, and solar. However, it remains heavily encouraging private sector participation to reduce import
skewed towards imported fuels, particularly oil and LNG. dependency. Initiatives such as the Medium-Term
The limited domestic reserves of oil and natural gas, Development Framework and Vision 2025 underscores a
coupled with underdeveloped coal potential, have strategic shift towards sustainable energy development
intensi ed reliance on imports. Energy is a fundamental with focus on indigenous resource mobilization,
driver of economic progress, with reliable supply essential infrastructure modernization and long-term energy
for sustaining industrial activity, urban development, and security.
Pakistan Fossil Fuel Industry: Key Milestones (1947–2025)

YEAR KEY DEVELOPMENTS
Energy system largely biomass-based (wood, dung, traditional fuels) with minimal fossil fuel infrastructure. Shift
1947 began with major gas discoveries: Sui (1952–53) in Balochistan and Mari (1957) in Sindh, forming the foundation
for urban and industrial energy supply.
1961 Exploration expanded in Punjab, leading to discovery of the Toot Oil eld (1961).
1967 Toot Oil eld (drilled in 1964) began commercial production, marking Pakistan’s rst commercial crude oil output.
Development of state-owned petroleum institutions, later consolidated into Pakistan Petroleum Ltd (PPL) and
1970
Pakistan Oil elds Ltd.
Establishment of the Hydrocarbon Development Institute of Pakistan (HDIP) under the Ministry of Petroleum &
1975
Natural Resources.
Introduction of Pakistan’s rst comprehensive Petroleum Policy, formalizing upstream and downstream
1991
hydrocarbon governance.
Development of FOTCO Oil Terminal (Port Qasim) with ~9 million tonnes/year capacity, strengthening import,
1995
storage, and distribution amid rising oil demand and imports.
Continued oil and gas discoveries in Sindh and Punjab by PPL, OGDCL, and Mari Petroleum, along with
2000
development of onshore elds in Sindh, Potohar, and Khyber Pakhtunkhwa.
Establishment of OGRA, regulating oil, gas, LNG, and LPG sectors through licensing, pricing oversight,
2002
infrastructure regulation, investment facilitation, and supply security management.
Foreign oil companies such as Shell, Chevron, and TotalEnergies remained active in downstream fuel retail,
2010
lubricants, and distribution, with limited major equity expansion in local rms.
Energy mix remained gas-dominant; declining domestic elds led to increased imports of crude oil, re ned
2012
petroleum products, and furnace oil driven by transport and power demand.
EETPL LNG Terminal became operational (March 2015), Pakistan’s rst LNG import and regasi cation facility. FSRU-
2015
based system (~170,000 m³ storage; 550–690 mmscfd capacity).
Pakistan began LNG imports from Qatar (Ras La an) under rst long-term G2G agreement: 3.75 MMT/year for 15
2016
years, later extended in 2022 for 10 more years.
PGPL LNG Terminal became operational (Sept 2017), expanding LNG infrastructure with FSRU-based capacity
2017
(~171,000 m³ storage; 600–750 mmscfd regasi cation).
Agreement with Saudi Arabia to develop a re nery in Gwadar. Downstream sector remained stable and JV-led,
2018
with global majors focusing on consolidation and selective participation.
Structural shift with Saudi Aramco acquiring a 40% stake in Gas & Oil Pakistan Ltd (GO), marking one of the largest
2023
foreign investments in downstream fuel retail.
LNG demand declined from 8.2 MMT (2021 peak) to 6.1 MMT, driven by solar adoption and industrial slowdown,
2025
creating temporary system oversupply.

82 ICMA’s Chartered Management Accountant, Mar-Apr 2026