Pakistan is now feeling the impact of the closure of Strait of Hormuz. Due to the closure the LNG supplies are facing major disruptions.
The fears of price surge, gas crisis and load shedding are rapidly growing due to dozens of shipments being halted.
The sources suggest that in Pakistan, 22 LNG cargoes were scheduled to arrive in Pakistan by May. However, they have stopped due to the closure of the Strait of Hormuz.
Due to the closure, a sudden disruption has taken place in the imported liquefied natural gas. This has raised serious concerns about energy shortages across the country.
It has been warned by officials that the situation could significantly affect both pricing and supplies.
Prices of Gas Likely to Surge
It is expected that this suspension of LMG exports will lead to a major increase in gas prices.
It has been indicated by the sources that authorities may be forced to raise tariffs so the revenue targets can be met in the gas sector.
It has been cautioned by the experts that if the supply gap persists, then consumers will face a sharp rise in utility bills in the coming months.
The gas sector is already facing severe financial strain. The revenue shortfall due to the LNG shortfall is likely to widen.
The combined revenue for Sui Gas companies this year exceeds Rs852 billion. Out of this massive revenue, a target of Rs515 billion is for just the Sui Northern Gas Pipelines Limited.
Sui Southern Gas Company aims for Rs347 billion.
About more than 40 per cent of the revenue of gas companies comes from the power sectors and fertilisers.
Other than this significant income is being generated from the CNG sector and captive power plants.
If any disruption to supply in these sectors is faced, then it will further complicate the financial outlook for gas utilities.
Domestic consumers will face the burden
It has been warned by sources that if cross-subsidies and tariff differences are removed, gas prices for domestic consumers could significantly become more expensive.
For households that are already facing inflationary pressures, this raises grave concerns.
Also read: Karachi gas crisis: Consumers struggle despite paying high bills
