Islamabad [Pakistan], June 26 (ANI): Pakistan is witnessing a power crisis after it failed to agree on a deal for natural gas supply next month, according to media reports.
Reports say renders 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, Geo tv reported.
State-owned Pakistan LNG Ltd scrapped a purchase tender for July shipments of liquefied natural gas 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.
State Minister for Petroleum Musadik Malik has warned of power load-shedding in July and gas shortage in the coming winters in the country.
Responding to questions on the LNG tenders, Zakaria Ali Shah, a spokesman for Pakistan’s energy ministry said: “We’re adopting an alternate strategy.”
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. Prime Minister Shehbaz Sharif pledged Thursday to take further steps to end blackouts.
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.
“Deferred payment obviously would be enormously beneficial for Pakistan in the way of cash flows, but that is not the only discussion that we are having,” Malik said in an audio message, describing the discussions as “preliminary”, however, Qatar’s government did not immediately respond to the request.
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.
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)
This report is auto-generated from ANI news service. ThePrint holds no responsibility for its content.
Source: The Print
