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January 17, 2021

Production and LNG

Editorial

 
January 17, 2021

The LNG crisis we have faced through this winter due to government incompetence and delay in purchasing LNG during the summer when rates had fallen to record lows, and which has been deeply investigated by Geo News through its programmes, will continue into March and perhaps even later. While a loss of millions has already been incurred by the delay in buying LNG, it now seems further losses will be caused because Pakistan must now acquire LNG for March at an average of 19 percent whereas in December, had it been bought even at that time rather than earlier in the year, it was available at far lower costs. This means damages of millions to the country. Pakistan had failed to purchase LNG at an acceptable price for the first 15 days of January, which explains why many domestic consumers are struggling to cook their daily food on wood or cylinders, if they are able to obtain them. And business is faltering as production goes down due to the lack of gas.

The whole situation amounts to a national crisis. Experts from the sector have said space was available in the terminal at Karachi Port to store gas. Even now, some insist that the longer-term agreements signed by the PML-N government are what is keeping some gas at least flowing into the country. Had these not been in place it may have been impossible for Pakistan to acquire any LNG at all. Yet, the current government has accused the previous government of purchasing gas at higher prices and causing damage to the country. But somehow we are still facing huge losses due to the long delays in bidding for gas and then tendering for bids from international companies selling the product – during this ongoing regime. As a result, there is a loss not only in financial terms, but also in terms of industry and to domestic consumers who must manage without gas. Both Nadeem Babar, the prime minister's special assistant on energy and Energy Minister Omar Ayub have denied any misdoing as far as the purchase of LNG goes. But perhaps it is time the prime minister asked his team some tough questions, as a true leader should. After all, it should not be acceptable to be using highly expensive furnace oil to produce energy when LNG could have been bought at cheaper rates had this been done earlier in the year – especially when there were already predictions of a long, hard winter coming in from the Met Office and other international bodies. It is time we received some answers. As consumers who pay bills regularly, we deserve these. None have been forthcoming and so far. And Pakistan continues to struggle to find gas at prices it can afford.