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Pakistan energy prices to rise until year-end: Energy ministers

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Islamabad | July 2, 2022 3:25:44 PM IST
While Pakistan stands on the brink of financial collapse, the Shehbaz Sharif government has said the energy prices will keep increasing in the country for the next three to four months due to policies implemented by Imran Khan.

Addressing separate pressers in Islamabad, the Pakistan energy ministers -- Khurram Dastgir and Musadik Malik -- on Friday said the downward trend will not start before November-December this year.

They said the PTI government had tied their hands with legal compulsions for price and there was no way out of the quagmire before the completion of corrective reforms, the Dawn newspaper reported.

The Pakistan ministers claimed that Imran Khan's government kept delaying price adjustments for electricity and natural gas and changed laws before leaving to ensure the new government was left with no choice but to clear the backlog.

According to the Shehbaz Sharif government, the PTI government did not arrange LNG, coal and furnace oil imports when their prices were at their lowest and international lenders like the World Bank and IMF were providing cheaper and unconditional loans to sustain the impact of the Covid-19 pandemic.

Firstly, the fuel prices increased by 300 to 400 per cent by the time the Shehbaz Sharif government came into power. On top of that, these commodities were unavailable in the market at any price. "They (PTI) laid traps for us", said Malik.

Power Minister Khurram Dastigir Khan said Pakistan's power demand had gone beyond 30,000MW on Thursday against a power supply of about 21,842MW while economically manageable capacity was no more than 25,000MW. Khan said the distribution companies faced about 6,000MW a shortfall on Thursday.

With the COVID-related supply disruptions and subsequent effects of the Russia-Ukraine conflict that exacerbated the situation, Pakistan's energy crisis is set to worsen in the near future as the cash-strapped country struggles to procure liquefied natural gas (LNG) at an affordable rate.

This crisis comes as the spike in global energy prices has pushed Pakistan's electricity fuel costs by more than 100 per cent. Last week, the state-owned LNG Ltd cancelled an expensive offer it has received against a tender for four cargoes of LNG for July shipments.

"Pakistan's energy crisis is set to worsen over the next several weeks as it struggles to procure LNG at an affordable rate when little is available in an international market that has been sorely affected by the political fallout of the Russia-Ukraine war," the Dawn newspaper said in an editorial.

Musadik Malik this month said the country's failure to find a bidder for LNG slots had forced authorities to shift to alternative sources of energy for power generation, which would take a month or so to yield results.

"The situation is that we have carried out two rounds of tenders of three to four tenders each, but no one responded to them," Dawn quoted Malik as saying. (ANI)

 
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