Pakistan may witness unprecedented gas shortages this winter as local media reported that the state-run Pakistan State Oil (PSO) has entered a financial crisis.
Last week, Pakistan’s Petroleum Ministry informed the parliamentary standing committee that households are due to receive gas just three times a day for cooking due to acute shortages and the forex crisis.
“There would be no gas supply (to household consumers) for 16 hours in a day,” Capt. (retd.) Muhammad Mahmood, a high-ranking oil official, said.
Households will receive three hours of gas in the morning, two hours in the afternoon, and three hours in the evening. Other sectors including power generation, fertilizers and CNG will also receive less gas.
According to reports, PSO failed to honor commitments worth around $985 million for the import of furnace oil and LNG.
“The worrying liquidity crisis has virtually put the LNG supply at risk for the winter season as the receivables and payables of PSO have scaled up to Rs890 billion (approx. $4 billion),” a senior official at the Ministry of Energy said.
PSO’s interest payments to Kuwait Petroleum Company and LNG payments to Qatar have surged to $983 million, it has been reported.
The crisis has been exacerbated as the state-owned firm informed the government that it will not be able to further borrow the funds needed to maintain future LNG supply.
The firm has allegedly not been receiving dues from retailers and the power sector, triggering the current liquidity crisis.
Asian countries have been facing shortages of oil and gas supply after European countries offered higher prices to gas producers to replenish energy for the winter, after pipeline imports from Russia were severely reduced following EU sanctions.
Trade data suggests that December and January LNG contracts are trading 35 percent higher than in November.