Pakistan is again facing an escalation of power crisis after it failed to agree on a deal for natural gas supply next month. Tenders for July were scrapped due to high price, and low participation as the nation is already taking action to tackle widespread blackouts, Geo News 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 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.
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 just as hotter weather boosts air conditioning and power demand, Geo News reported.
"We're adopting an alternate strategy," Zakaria Ali Shah, a spokesman for the Energy Ministry, said in response to questions on the LNG tenders.
He said that Pakistan does not currently have a fuel shortage, adding that the nation can divert supplies to high-priority sectors like power generators in emergency situations.
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 last week to take further steps to end blackouts.
LNG prices have surged as Europe ramps up imports of the super-chilled fuel amid mounting concerns that Russia will cut pipeline gas supply.
An outage at a key US export facility has led to further tightening.