Miftah Ismail@MiftahIsmail
Pakistan was getting 8 LNG cargoes from Qatar every month. 6 from a deal made in 2016 and 2 from a deal made in 2020. The deal made in 2016 is due for renegotiation this year. It is now quite clear we aren’t going to get any more cargoes from Qatar for a few months and the 6 cargo deal will not be renewed.
How will or should we deal with this shortage.
1. The biggest help in dealing with the lack of LNG will come from solar power installed by industrial and domestic consumers across Pakistan. While the Shehbaz Sharif government has been trying very hard to disincentivise solar power across Pakistan, it hasn’t succeeded and it is this solar power that is going to be Pakistan’s saviour.
2. Pakistan has already started curtailing gas to the (much pampered and favoured) fertiliser industry. It might even be needed to curtail some gas to commercial enterprises like restaurants & hotels (excluding tandoors and dhabas), and even some upscale domestic users.
3. Pakistan should now run its coal plants and not give any gas to power plants. We have the curse of excess capacity: we either have to keep idle and pay capacity payments to gas plants or to coal plants. We should now run the coal plants and keep idle gas plants.
4. This govt has made gas to industry that choose to, or are forced to, make their own power prohibitively expensive. This has resulted in many opting for solar, wind and biomass power. This has further decreased reliance on grid. But now with gas shortage, the govt should ensure continuous supply to industry of power and of process gas.
5. Had the govt in the last two years of cheap oil and gas made some basic reforms, worked on privatisation, introduced competition by giving Third Party Access, reduced gas theft and losses, rationalised prices and stopped giving subsidies to its favoured lobbies, Pakistan would have been in a much better position to face the coming crisis. But given this incompetent and timid government, the decisions of consumers to not rely on government and install their own solar, wind and biomass power will be out saving grace.