The Government of Pakistan has decided to immediately double the supply of locally produced natural gas to the power sector in order to control rising electricity tariffs and unannounced load shedding in the country.
According to media reports, arrangements are being made on a war footing to increase gas supply to power plants from the current 85 to 90 million cubic feet per day to 170 million cubic feet per day by the end of April or early May.
Federal Minister for Energy Awais Ahmad Khan Leghari issued a strong warning during a recent meeting of the special cabinet committee on petroleum prices and supply. He said that if additional gas is not provided to the power sector as an alternative to LNG, electricity tariffs will rise sharply due to higher fuel costs, or the country may face large-scale load shedding.
During the meeting, it was also debated whether to impact 7 million gas consumers or provide relief to 30 million electricity users.
According to reports, the government is also considering diverting an additional 25 million cubic feet per day of gas from the CNG sector, while trying to protect gas supply to the fertiliser sector to avoid a shortage of urea in the country.
Due to the significant price gap between locally produced urea Rs4,500 and imported urea Rs15,000, strict monitoring of stock has also been decided to prevent smuggling.
On the other hand, if gas shortages occur for domestic consumers, LPG will remain the only alternative. However, its prices have already doubled compared to the rates set by Oil and Gas Regulatory Authority, which, due to weak enforcement, could become an additional burden on the public.
Pakistan’s energy sector is currently facing a severe “fuel choice” crisis. High global prices and limited availability of imported LNG have increased reliance on local gas.
For the government, it has become a political and economic gamble to decide which sector, domestic, industrial, or agricultural, should face gas cuts in order to supply power plants. Awais Leghari’s statement reflects the harsh reality that further increases in electricity prices are no longer bearable for the public, leaving the use of cheaper local fuel as the only viable option.
