Direct as well as the trickle down impacts of the Russia-Ukraine war have gobbled up the economies of the developing and even developed countries in the shape of spiraling energy crises and increased prices of petroleum products and gas. As Russia is the major oil and gas suppliers to the European Union, and has slowed supplied to its major clients, and the American sanctions on Russian companies have made it increasingly difficult for the developing countries to turn to Moscow, all buyers from all parts of the world have turned to the Gulf region to find the consignments of petrol and gas, including the liquified natural gas (LNG). Pakistan is among the worst affected countries because of the buying spree as it has failed to secure even a single consignment of the LNG in recent biddings because of the disinterest of the selling companies, and overbooking of the consignments by the European countries. To put things straight, the Pakistan LNG Ltd opened a tender on June 16 for four cargoes for July and not even a single seller for any tender. The much-needed admission came from State Minister for Petroleum Musadik Malik who says that now in the face of glaring shortage of the LNG, the power sector may turn to alternative but equally expensive sources of energy for power generation, such as furnace oil and coal, and even these consignments may not land in a week or two. Revealing the situation, the minister said the country floated three to four rounds of tenders for the LNG, all unresponsive due to the high demand of the gas in Europe. The buying spree has escalated the prices of LNG from $4 per tonne a year ago is now not available at $40.
There is no prediction available that when the market comes to normalcy since the Russia-Ukraine war may take years as per the Nato chief, and in other words, the developing nations may be reeling from the energy pains in the future. So far Pakistan’s case, the country does not have energy and the available sources are highly priced. The crisis also points to the government’s poor planning by betting all on the LNG-fired power plants during the PML-N government. The government has been delaying turning to alternative sources of energy, such as solar, wind and hydraulic. The country is reeling from hours-long loadshedding, which is directly and indirectly impacting the production of every sector. Power consumers will have to pay high power bills from July as the government has increased power and gas tariffs. Every measure to save the teetering economy may put a burden on the common man. The first alternative measure the government may take is to turn to Iran and Russia for fuel supplies. The other measures which must be taken is to launch save-energy plans and use the sunshine hours more and more. More and more power should be directed to industries. More out-of-box solutions are needed to cope with the seen and unseen landmines.
