Costly LNG imports, risk of load shedding in Pakistan

Pakistan is once again facing concerns of energy crisis due to rising heat and electricity demand, due to which the government has decided to import expensive LNG.Pakistan LNG Limited has recently issued urgent tenders to meet the gas shortage. Under this initiative, three cargoes have been acquired, the prices of which are unusually high in the global market.

According to the bids received, the price of LNG has reached about $ 18 per mmBtu, which is much higher than Pakistan’s long-term contracts. Despite this, the government took this expensive decision to maintain supply.

This situation arose when global gas shipments were affected due to obstacles in the Strait of Hormuz, which caused prices to increase sharply. The country is currently reporting a power shortage of more than 4,500 MW, resulting in prolonged load shedding in many areas.

According to officials, if gas supply is further reduced, not only will load shedding increase but electricity may also become more expensive for consumers, as dependence on expensive fuel will increase.

The Power Division has already warned that in the event of a gas shortage, the country will have to use expensive sources like diesel, which will significantly increase electricity prices.

In such a situation, the expensive purchase of LNG is being seen as a temporary relief, so that the energy system is not completely affected.