Sun, 14 Aug 2022

Islamabad [Pakistan], July 4 (ANI): Amid a shortage of gas and electricity and unprecedentedly expensive fuel imports, Pakistan is seeking more gas imports from Qatar on deferred payments.

Pakistani authorities are engaging with Qatar at different levels to increase the Liquefied Natural Gas (LNG) supplies to Pakistan to make up for the shortage of four to five cargoes (about 400-500 million cubic feet of gas per day) every month, the Dawn newspaper reported.

Qatar wants to hear an update regarding the removal of obstacles to its plan to set up a new LNG terminal near Karachi at every engagement that is carried out between both the countries.

The Pakistan government has failed in last three attempts over the past couple of weeks to secure even a single cargo for July from the spot market as whatever quantities are available in the spot or otherwise are herded by the Unites States towards Europe suffering energy shortages amid the Russia-Ukraine war and ready to pick every molecule at any cost.

The single bid of USD 40 per million British thermal units (mmBtu) for the delivery in July is expensive as compared to the long-term plan of Qatar which has a contract price of USD 11-14 mmBtu.

It looks extremely unlikely that the government can use its own capacity for the next few months as the spot price of LNG is not viable, the Dawn reported.

Earlier in the month of June, Finance Minister Miftah Ismail said that Pakistan will seek a deferred payment plan for liquefied natural gas (LNG) bought under long-term deals with Qatar.

Petroleum Minister Musadik Malik, who was in Doha earlier for talks with Qatari Minister of State for Energy Affairs and Qatar Energy chief executive Saad al-Kaabi, confirmed talks but said the government was exploring different "innovative" pricing and supply strategies in broad-based talks.

Malik said the government was tapping all avenues to see how additional molecules are secured to meet the needs of the local industry and the people at competitive costs.

Pakistan already has two long-term supply deals with Qatar -- the first signed in 2016 for five cargoes a month, and the second in 2021, under which Pakistan currently gets three monthly shipments but the nation is currently under a massive grip of widespread power outrages as procurement of the chilled fuel remains unreliable and expensive due to its increased reliance on LNG for electricity generation.

The fast depletion of the foreign exchange reserves was the result of Pakistan's inflation of twin deficits, and a lack of foreign currency inflows.

Inflation in Pakistan entered the double-digit mark in July, the biggest surge in nearly six years.

In April, imports increased by 72 per cent, leaving no room for the government to improve its external balances while the foreign exchange reserves of the central bank have touched $10.3 billion, the lowest since June 2020. (ANI)

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