Tue, 09 Aug 2022

Islamabad [Pakistan], June 28 (ANI): After Pakistan failed to clinch a deal for natural gas supply for next month, Prime Minister Shehbaz Sharif on Monday warned of increased electricity load shedding in July.

PM Shehbaz said that Pakistan could not get LNG supply but the coalition govt is trying to make the deal possible, reported Geo News.

Pakistan is facing an escalation of its power crisis. Moreover, Pakistan's monthly fuel oil imports are set to hit a four-year high in June, Refinitiv data showed, as the country struggles to buy liquefied natural gas (LNG) for power generation amid a heatwave that is driving demand, reported Geo News.

Pakistan had cut fuel oil imports since the second half of 2018 as LNG prices were low, but it had to at times switch back to oil since July 2021 because of sky-high LNG prices.

Tenders for July were scrapped due to high price, and low participation as the nation is already taking action to tackle widespread blackouts.

This is the third time this month that Pakistan has failed to complete an LNG tender for July, and the country's inability to purchase fuel threatens to exacerbate electricity shortages.

Earlier, State-owned Pakistan LNG Ltd scrapped a purchase tender for July shipments of LNG after it received an offer that would've been the most expensive shipment ever delivered to the nation, according to traders with the knowledge of the matter, reported Geo News.

Pakistan's government is attempting to boost energy conservation, has cut working hours for public servants and ordered shopping malls to factories to shut early in various cities, including Karachi.

Pakistan already has two long-term supply deals with Qatar -- the first signed in 2016 for five cargoes a month, and the second in 2021, under which Pakistan currently gets three monthly shipments but the nation is currently under a massive grip of widespread power outrages as procurement of the chilled fuel remains unreliable and expensive due to its increased reliance on LNG for electricity generation.

Petroleum Minister Musadik Malik, who was in Doha early this week for talks with Qatari Minister of State for Energy Affairs and Qatar Energy chief executive Saad al-Kaabi had confirmed talks but said the government was exploring different "innovative" pricing and supply strategies in broad-based talks.

Ismail said the government was also speaking to Qatar about a new five or 10-year LNG supply deal for three monthly cargoes, as well as an additional cargo under an existing deal.

The fast depletion of the foreign exchange reserves was the result of Pakistan's inflation of twin deficits, and a lack of foreign currency inflows.

Inflation in Pakistan entered the double-digit mark in July, the biggest surge in nearly six years. (ANI)

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