PAKISTAN: Pakistan is cutting electricity to households and industry as the cash-strapped country can no longer afford to buy coal or natural gas from overseas to fuel its power plants.
The South Asian nation is struggling to procure fuel from the spot market after prices of liquefied natural gas and coal surged to records last month as the war in Ukraine exacerbated supply shortfalls. Pakistan’s energy costs more than doubled to US$15 billion in nine months ended February from a year earlier, and it isn’t able to spend more on additional shipments.
About 3,500 megawatts worth of power capacity had been shut due to the fuel shortages as of April 13, according to a Twitter post by Miftah Ismail, who has been selected as finance minister by new Prime Minister Shehbaz Sharif. A similar amount is offline due to technical faults, he said. The more than 7,000 megawatts represents almost a fifth of total generation capacity, according to Tahir Abbas, the head of research at Arif Habib Ltd. in Karachi.
Pakistan’s long-term LNG suppliers canceled several shipments scheduled for delivery over the last few months, further tightening supplies. The nation released a tender on Sunday to procure six LNG cargoes from the spot market, but that could end up costing the government hundreds of millions of dollars if fully awarded.
– THE ECONOMIC TIMES