No new connections, price hike and limited supplies: Pak caught in grave gas crisis ahead of winters
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Amid an intense economic crisis, Pakistan is bracing for another shocker this winter: An impending energy crisis fueled by a grave shortage of gas supplies.
Pakistan’s Dawn reported that Pakistanis have been made aware of the government’s plans to limit the duration of gas supply to just eight hours a day.
Gas prices have already witnessed a sharp hike earlier this year, with the country’s Caretaker Energy Minister Muhammad Ali saying that the move was necessary in order to curb the gas sector’s circular debt.
“There will not be a resurgence of the circular debt in the gas sector after the recent increase in gas prices,” he said, adding that the government was working to avoid the addition of further circular debt in the power sector under a commitment with the International Monetary Fund.
Price hikes
Justifying the hike in the prices of natural gas, Muhammad Ali said that it was due since no price hike took place during the first half (July to December 2022) of the previous fiscal year.
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He also said that due to the persistent shortage of natural gas, the daily household supplies would be limited to eight hours every day, in morning, afternoon and evening intervals.
He further advised Pakistani consumers to shift to LPG.
The Pakistani government has also made clear that an old ban on issuing new gas connections would continue.
Gas sector on the verge of collapse
The Pakistani minister admitted that the country’s gas sector was on the verge of collapse as “the exploration and production (E&P) companies were leaving the country due to financial risks.”
Watch:Pakistan sets up centres for Afghan migrants, to be given food and medical aid
He explained how the IMF’s policies had further aggravated the problem since they couldn’t invest enough in exploration activities and nor could import gas.
What next?
The government says it has arranged two LNG cargoes for December to minimise the winter gas crisis. It claims it was looking to book two more cargoes for January.
However, the government could face serious challenges in securing these cargo supplies as suppliers have largely stopped offering spot shipments to Pakistan due to the nation’s credit risk.
Factories across the country are shutting down because of high energy costs or lack of gas, exacerbating Pakistan’s economic malaise.
(With inputs from agencies)
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