The Role of State in Natural Gas Resource Management and Allocation Policy: The Case of CNG Sector in Pakistan

Abstract

Effective resource management is essential for the continued progress and economic growth of any country. Natural gas is one of the resources which fulfill most energy requirements of Pakistan. Since 1990s, Pakistan is facing serious energy crisis which compromised its economic growth seriously. At the same time, the country had to spend hefty amount of foreign exchange on the import of petrol and diesel to fulfill energy requirements of different sectors. In order to resolve these crises and save heavy amount of foreign exchange, the Government of Pakistan introduced Compressed Natural Gas (CNG) an alternative fuel for vehicles in 1992. This paper analyzes official documents and published research to describe the effectiveness of natural gas management by successive governments in Pakistan. Documentary evidence was triangulated with interview data to conclude that although Pakistan has resource potential to cater CNG sector, successive governments since 1990s have not been able to effectively manage the CNG sector. Failure to formulate a sound policy for natural gas management and allocation to different sectors and failure to initiate enough exploration projects were the key reasons identified.