There is a very real danger that the coming winter months in Pakistan, and particularly in the north of the country, will be particularly cold ones with an insufficient supply of gas. This is chiefly because Pakistan LNG Limited failed to place tenders for gas supply in time to the international market. It is also now being forced to obtain LNG at far higher prices than would have been the case had it purchased this vital commodity in summer, when prices had fallen, and were at a far lower rate than is presently the case. To make matters worse, Pakistan’s has received no bid at all for the supply of LNG during the first 20 days of January. This could leave the country with a huge shortfall of gas during the coldest weather in the year.
The problem lies essentially in the fact that unlike 2019, this year the government put in bids for the purchase of LNG far later than it had the previous year. For example, it did not purchase Brent in the summer months, when it was available at around $5, but put in its tenders at a far late stage in October to be opened in November. By then prices had risen sharply. In contrast, even India, despite the economic crisis caused by Covid-19, had made its purchases of gas, no doubt recognizing that this will be acquired during the winter. Now, in a strange turn-around, the special adviser to the prime minister on energy is blaming the problem on the media. He says that because the media had blamed the government for mismanaging the problem and for buying LNG at higher rates, including the rate put forward by Qatar, countries are not willing to make supplies because they have lost faith in Pakistan. This is a rather bizarre claim. The fact is that the media had only published the figures that were presented to the prime minister at the cabinet meeting and later disclosed to the media. Naturally, these figures were intended for publication. It is difficult to see why the government cannot at least acknowledge the problem. Currently it is buying LNG at a far higher price than that purchased by the PML-N government, for which three members of that government faced a NAB inquiry and Shahid Khaqan Abbasi, a former prime minister, was placed behind bars for many months.
We have a situation where the PM seems to not be getting the complete picture about LNG supply and the manner in which it is being purchased. The reality is that for November, December, January and February, Pakistan had made no arrangements in advance. It has begun to do so only at a time when prices have already risen sharply. And in some cases, when there is entirely insufficient supply in the marketplace. Blaming this on supply and demand is not adequate given that we have known — always — that winter means a rise in gas demand. A full-scale inquiry could explain why millions of rupees have been lost and what this has cost the people of Pakistan and who has been kept in the dark and why.
