Why Qatar’s LNG Signal Matters for Pakistan
Pakistan has activated an energy contingency plan after Qatar warned that scheduled LNG cargoes could be disrupted because of the Gulf war. LNG is a key back-up fuel in Pakistan’s gas mix. When cargoes are delayed or become too costly, the impact shows up fast: lower gas pressure, higher power costs, and tougher choices about who gets gas first.
The policy goal is straightforward—keep household cooking and essential transport running, while reducing strain on the system and avoiding panic-priced spot LNG purchases.
What the Government Will Do Immediately
A ministerial committee briefed Prime Minister Shehbaz Sharif and has been authorised to take rapid decisions to maintain supplies. Finance Minister Muhammad Aurangzeb is chairing the committee, with the Petroleum Division and other stakeholders on board.
The first step is to restore around 350 mmcfd of domestic gas production that was earlier curtailed to make room for surplus LNG. Bringing that gas back online can cushion short-term shocks if LNG delivery schedules slip.
The second step is tighter allocation. Gas will be cut to fertiliser plants, flow to power plants may be reduced from roughly 250 to about 80 mmcfd, and supplies to CNG stations could be curtailed if needed. Officials also indicated household rationing could be considered if the situation worsens. To cover evening electricity demand, some closed plants may run on alternative fuels—helpful for grid stability, but usually costlier.
Rising Oil and LNG Prices Add External Pressure
Energy risks are rising at the same time global prices are moving up. Crude oil climbed above $83 per barrel, a level that typically feeds into higher pump prices and a bigger import bill. LNG prices are also firming because supplies are tight, making alternative cargoes harder to book.
Route security is another concern. Disruptions around the Strait of Hormuz or the Red Sea can delay deliveries and raise freight and insurance costs. Officials said Pakistan’s crude oil supplies could be affected if tensions escalate further, which is why the government is exploring options to keep cargoes moving through safer routes where possible.
Trade Deficit Worsens as Exports Fall and Imports Rise
Pakistan’s external account picture is also under strain. New trade data for July to February showed the trade deficit reaching $25 billion—about 25% higher than the same period last year. Exports over the eight months fell to $22.7 billion (down 7.3%), while imports rose to $45.5 billion (up 8.1%).
These figures matter for energy because oil and LNG are dollar-priced. A wider deficit means more pressure on foreign exchange and higher costs for fuel procurement. Exporters argue an overvalued rupee is hurting competitiveness; the rupee-dollar rate was around Rs279.5 per dollar with gradual movement. Meanwhile, remittances are helping cushion imports, but a prolonged Gulf conflict could also disrupt regional labour markets and inflows.
For consumers and businesses, the near-term watchpoints are clear: LNG cargo reliability, the duration of elevated oil prices, and how quickly domestic gas production can be restored. The contingency plan provides levers to manage a sudden shock, but sustained stability will depend on calmer regional conditions and stronger trade and forex buffers at home.
