Pakistan has swung from an LNG surplus to a critical shortage in months, forcing emergency spot-market purchases after disruptions to imports from Qatar. Officials warn that higher spot prices could worsen power outages and add strain to public finances already under pressure.

From Surplus to Shortage: A Sudden Shift Earlier this year Pakistan was running an LNG surplus as demand had declined since 2021. Imports fell from a peak of 8.2 million tonnes in 2021 to about 6.1 million tonnes by late 2025; the government sold excess shipments abroad and shut some domestic wells to avoid pipeline damage. In late February, a regional military campaign named "Epic Fury" escalated tensions and disrupted some long-term LNG deliveries in the area, contributing to the sudden shortfall for Pakistan. Pakistan’s Energy Mix Under Pressure Pakistan’s gas supply combines: - domestic production - long-term LNG contracts - smaller supplementary sources With limited emergency LNG reserves, supply shocks leave the system exposed. The electricity sector—dependent on regasified LNG for part of its generation—has been hit; outages and temporary shutdowns of some LNG-fired plants have tightened overall power availability. Spot LNG Imports: A Costly Stopgap Officials are considering spot-market LNG purchases to close the immediate gap. Spot cargoes can provide short-term relief but typically trade at a premium versus contracted supplies, raising concerns about repeated spot buys adding to fiscal pressure. Key trade-offs: - Immediate relief: spot cargoes can arrive faster than new long-term contracts - Cost: higher spot prices risk increasing government and utility bills - Fiscal impact: repeated reliance on expensive spot purchases could deepen budgetary strain Electricity Rationing and Load Management The power division confirmed that overall generation has been managed to meet general demand, but peak-hour consumption spikes continue to strain the system and have led to load management measures in some areas.

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Imports have fallen from 8.2 million tonnes in 2021 to about 6.1 million tonnes by late 2025 — a decline that leaves little room for supply shocks and has pushed Pakistan onto the more costly spot market, with consequences for both electricity supply and the national budget.

This article was created with AI assistance.