By SKM
April 23, 2026
ISLAMABAD: Pakistan has been forced to urgently tap the international liquefied natural gas (LNG) spot market as rising electricity shortages and fuel constraints trigger widespread blackouts across the country. The Pakistan LNG Limited (PLL) has issued an emergency tender under amended Public Procurement Regulatory Authority (PPRA) rules to procure three LNG cargoes, each of around 140,000 cubic metres, in an attempt to stabilise gas-fired power generation during the peak summer demand period.
The cargoes are scheduled for delivery between April 27–30, May 1–7, and May 8–14 at Port Qasim, with bids to be received and opened within a few hours on April 24, reflecting the urgency of the procurement process. Authorities have indicated that contracts are expected to be finalized the same day, underscoring the severity of the supply shortfall.
The move comes as global LNG markets remain highly volatile. Spot LNG prices are currently hovering around $15.81 per MMBtu, while Asian benchmark spot rates have climbed to approximately $16.05 per MMBtu, representing a sharp increase of about 54% since late February 2026. The surge in international prices, combined with freight, insurance, and geopolitical risk premiums, is expected to significantly raise Pakistan’s import costs.
Officials said that, unlike previous procurement cycles, all accepted bids will be honoured without renegotiation, even if market conditions change. This marks a shift from earlier practices where Pakistan often attempted to renegotiate prices or compare bids with alternative suppliers such as SOCAR.
Pakistan’s electricity system is currently under severe strain. National demand stands at approximately 18,700 megawatts, but is projected to rise above 23,000 megawatts in May 2026 as temperatures increase. However, gas availability to the power sector has dropped sharply to only around 90 million cubic feet per day (mmcfd), forcing increased reliance on expensive furnace oil and diesel-based generation.
As a result, power generation from furnace oil has surged, pushing generation costs to nearly Rs75 per unit, significantly increasing pressure on already stressed electricity tariffs. Officials estimate that around 5,500 megawatts of generation capacity remains idle due to LNG shortages, further worsening the supply gap.
The shortage has led to intensified load management across the country. Distribution companies are implementing planned load shedding of around 2 to 2.5 hours during peak demand periods, while “economic load management” continues on high-loss feeders to reduce system stress and fuel consumption.
At the same time, hydropower generation has remained significantly below potential. Against an installed capacity of 11,500 megawatts, actual output has been limited to around 4,950 megawatts during peak hours, mainly due to reduced water releases, further constraining the overall supply mix.
The crisis has been compounded by disruptions in LNG procurement from international suppliers. Officials said Pakistan had initially planned to secure four LNG cargoes from QatarEnergy, but the arrangement could not proceed due to security concerns linked to heightened tensions around maritime routes in the Strait of Hormuz. The situation has also affected broader shipping confidence in the region.
In response, the government has accelerated emergency procurement through PLL, with the latest tender aimed at quickly bridging the widening supply gap. However, authorities have acknowledged that the reliance on expensive spot LNG imports will likely increase the cost of electricity generation, with potential upward pressure on consumer tariffs depending on final procurement prices.
Despite the urgency of the measures, officials admit the situation remains fragile. The combination of rising global LNG prices (around $15.81–$16.05 per MMBtu), soaring domestic demand (up to 23,000 MW), idle capacity of roughly 5,500 MW, and fuel costs reaching Rs75 per unit has created a tightly constrained energy system heading into the peak summer months. Ends
