That Pakistan faces a gas shortage in the winter months is not news. Months from December till at least March witness a hike in demand of gas, leading to a countrywide shortage. Considering that Pakistan imports the liquefied natural gas (LNG), the Pakistan LNG Limited (PLL) is expected to float the tender for bids months prior to December. But that has not been the case since the past three-years. What looked like incompetence on the part of the ruling PTI, now only smells of malfeasance after it has been unable to procure timely purchase of LNG third winter in a row. In its latest bid this year, the PLL has purchased the gas for a record high price of $30.6 per unit.
There is no denying the fact that the prices in the international market have witnessed a worrying increase but countries that placed orders way in advance were able to secure themselves from the rising costs. Because here is what is likely to happen now: expensive (read: costliest ever) LNG means rising price of electricity. It must be noted that the government had only recently hiked the energy tariff. Add to this a rise in subsidy bill at the backdrop of government’s commitment to provide LNG at a subsidized rate to export-oriented business. This would then lead to a price spiral with an increase in public debt – already 90 per cent above the GDP – and inflation that is currently over nine per cent. The same rising inflation that recently prompted the premier to announcing a Rs120 billion subsidy programme to low-income households. All this at a time when we already have an imminent debt crisis and a falling rupee.
In July 2020, the government had given a go-ahead to the private sector to import LNG but it was not allowed to do so by the state-owned PLL, whose intentions lately have been questionable. The private sector is, however, much better equipped to predict the market demand and supply. But as the people will now have to brace themselves for another price hike resultant of an expensive LNG purchase, the ruling PTI goes on to blame external factors. In 2019, it was the previous government. In 2020, it was lack of LNG storage. And this year, the ballooning global prices. We are being told that “Pakistan is not in another planet.” But the fact is the LNG saga could have been avoided, only if someone in the power corridors really wanted to.
