Cash-strapped Pakistan cuts power to households due to fuel shortage

Cash-strapped Pakistan cuts power to households due to fuel shortage

The electricity shortage is complicating the already difficult economic challenge for new Prime Minister Shehbaz Sharif.

Pakistan is cutting off electricity to households and industry as the cash-strapped country can no longer afford to buy coal or natural gas from abroad to fuel its power stations.

The South Asian nation is struggling to source fuel on the spot market after liquefied natural gas and coal prices hit record highs last month as war in Ukraine exacerbated supply shortages . Pakistan’s energy costs more than doubled to $15 billion in the nine months ending February from a year earlier, and it is unable to spend more on additional shipments.

About 3,500 megawatts of electric capacity had been shut down due to fuel shortages as of April 13, according to a Twitter post from Miftah Ismail, who was chosen as finance minister by new Prime Minister Shehbaz Sharif. A similar amount is offline due to technical faults, he said. The more than 7,000 megawatts represents almost a fifth of the total generating capacity, according to Tahir Abbas, head of research at Arif Habib Ltd. in Karachi.

The electricity crisis is complicating the already difficult economic challenge for Sharif – who has yet to appoint an energy minister – after former leader Imran Khan was ousted last week after a period of political unrest. A relatively poor country heavily dependent on energy imports, Pakistan has been particularly hard hit by rising fuel prices.

Pakistan’s long-term LNG suppliers have canceled several shipments scheduled for delivery in recent months, further tightening supplies. The country launched a tender on Sunday to buy six LNG shipments on the spot market, but it could cost the government hundreds of millions of dollars if fully awarded.

“Pakistan’s situation will not change in the short term as the global dynamics are still the same,” said Samiullah Tariq, head of research at Pakistan Kuwait Investment Co. ‘energy”.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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