Gas Load-Shedding
Caretaker Federal Minister for Energy Muhammad Ali has announced that gas consumers in Pakistan will face 16 hours of daily gas load-shedding during the upcoming winter season due to dwindling gas reserves. The government will provide domestic consumers with only eight hours of gas per day.
Because of depleting gas reservoirs, uninterrupted gas supply is not feasible in winter. Ali also mentioned that domestic consumers may need to switch from natural gas to liquefied petroleum gas (LPG) to meet their gas requirements.
Pakistan is experiencing an annual decline of 5% to 7% in its gas reserves, and new gas connections will be prohibited due to gas shortages.
In response to questions, Ali informed the media that the government has procured two gas cargoes for December 2023 from the spot market and plans to purchase two more for January 2024.
He explained that the government raised gas prices to reduce the circular debt in the gas sector, which had reached Rs2.1 trillion. With the new gas tariff, the government has halted the growth of circular debt in the gas sector, the minister added.
To meet local demand, the government is promoting exploration activities in the country. Ali said that the gas sector has been incurring an annual loss of Rs400 billion, while Sui gas companies are responsible for Rs190 billion in annual losses. The government faces Rs210 billion in losses in LNG due to cost differences.
Ali also mentioned that a Pakistani oil refinery has entered into an agreement with Russia to import 9 million barrels annually, potentially saving up to $15 per barrel for Pakistan.
