Pakistan is on the verge of a huge natural gas crisis as the prices of natural gas skyrocket! As a developing economy, Pakistan depends on gas imports and as the prices rise internationally, it is becoming harder for the government to keep up with the natural gas demands.
The crises will become most prominent in September and October as the government rejects 8 spot LNG cargoes due to very high prices. The prices reached $13.787-$16.0 per million British thermal units. The Pakistan LNG Limited (PLL) had approved 8 LNG cargoes earlier, 4 for September and 4 for October but had to cancel them.
The Chairman of Pakistan Gas Port, Iqbal Z. Ahmed stated that in the coming winter months, Pakistan will have to face power outages.
He added that industries, exports, and the general morale will take a serious blow due to the shortage. The energy crisis that was seen in the UK had hit China and will hit emerging markets as well. The situation might worsen as the demands for LNG increase in winters further increasing global prices.
Officials from PLL have stated that as the prices lower, they will re-tender the cargoes to fulfill the LNG demands. Earlier, PLL got the bid for $10.2937 to $11.7747 per MMBTU for the month of July. For August it got the bid for $10.51 per MMBTU to $10.8312 per MMBTU.
According to the PLL officials, if the prices do not tumble, they will opt for diesel and furnace oil to cater to power plants. That will produce costly electricity but will scale down the LNG crises that await us.