Prime Minister Shehbaz Sharif on Monday warned that the country is likely to experience more loadshedding in the month of July, as authorities have been unable to secure LNG for power generation at cost-effective rates.
Addressing ruling coalition partners and PMLN lawmakers in Islamabad, he said the government was working to ensure necessary LNG supplies could be secured, but admitted that the prevailing high tariffs globally had made it difficult to do so. According to data released by the Power Division, Pakistan had to scrap a tender seeking spot LNG supplies for July as it could only attract one bidder who had sought a price of over $40/MMBTU—the most expensive shipment of LNG ever offered to the nation.
The prices of LNG have spiked globally due to Russia’s invasion of Ukraine, which has increased the number of countries seeking fuel while reducing the supply available. Pakistan, already facing an economic crunch, is unable to match the rates that developed countries have been able to offer LNG suppliers.
Despite the looming power crisis, Sharif stressed that the incumbent government would bring about “better days” in future as the economy stabilized. “The coalition will definitely bring a change in its 14-month rule,” he said. “We will work with determination to transform the country into Quaid-e-Azam’s Pakistan,” he added.
Referring to the government’s progress in reviving a suspended International Monetary Fund (IMF) bailout, he claimed that the government had saved the country from the bankruptcy it had inherited from the ousted PTI administration. “The PTI government had violated the agreement it had inked with the IMF, therefore [the IMF] has now set tough conditions for us,” he said, explaining the recent decisions to impose greater taxes on various sectors of society.
Emphasizing that the government had imposed heavy taxes on the net income of the wealthy to avoid bankruptcy, Sharif said this was intended to prevent the impact from being shifted to the impoverished. “We hope to generate an additional Rs. 200 billion annually this way,” he claimed.
The prime minister also claimed that his government had made “great progress” in securing the import of cheaper coal from Afghanistan for the industrial sector and power generation. “We will save $2 billion annually by importing coal from Afghanistan instead of South Africa,” he said. “The quality of Afghan coal is as good as the one being imported from South Africa. We were thinking of options to stabilize our economy and Allah Almighty showed us a way,” he added.