Pakistan accelerated its search for alternative fuels in Russia, Nigeria and Venezuela to contain an energy crisis that is already putting pressure on its crude oil imports. crude oil imports, LNG supplyLNG supply and power generation. The decision comes amid tensions in the Middle East that have affected key supply routes and raised procurement costs for the Asian country.
In addition, the government ordered a review of the national oil supply chain to improve control over inventories, cargoes and domestic distribution. The measure seeks to reduce the risk of hoarding, misreporting and new bottlenecks in a market that is largely dependent on foreign trade.
Search for alternative fuels
In this context, Pakistan LNG Limited launched a tender to purchase three cargoes of liquefied natural gas. This is an important one-off purchase, as the country had not resorted to this type of operation with such urgency for more than two years.
The operation was activated after Qatar declared force majeure and halted shipments due to regional escalation. For Pakistan, LNG is a centerpiece of its energy matrix because it fuels power plants and helps meet demand during peak consumption months.
However, the reduced availability of imported gas is already reflected in power outages. Authorities estimate a shortfall of up to 6,000 megawatts, a figure that may increase if shipments are slow to arrive or if international LNG prices continue to rise.
The Strait of Hormuz aggravates energy pressure
On the other hand, the instability near the Strait of Strait of Hormuz exposed the fragility of Pakistan’s energy import system. This corridor concentrates a considerable part of the world’s oil and gas trade, so any restriction immediately affects countries dependent on Gulf suppliers.
Traditionally, Pakistan has bought oil from Saudi Arabia, the United Arab Emirates and Kuwait. Now, faced with pressure on these routes, the authorities are evaluating crude from Russia, Nigeria and Venezuela, provided the composition of the oil is compatible with domestic refineries.
Likewise, the government analyzes supply options based on technical and financial criteria. It is not enough to obtain available barrels: it is also necessary to verify the quality of the crude, maritime logistics, payment conditions, regulatory risks and actual processing capacity.
Pakistan State Oil faces record premiums
Meanwhile, Pakistan State Oil has already imported diesel at a premium of up to 34 dollars per barrel, a level that shows the tension in the market. This increase makes supply more expensive and could be passed on to electricity tariffs, fuels and industrial costs if containment measures are not implemented.
Prior to this pressure, premiums were much lower. The difference reflects how an external shock can alter the cost of energy in a matter of days, especially for economies with high dependence on imported fuels.
In addition, analysts warn that every sustained increase in the international oil price can increase Pakistan’s energy bill. This effect hits public accounts, reduces fiscal space and increases pressure on consumers and industries.
OGRA to review oil supply chain
At the institutional level, the executive committee of the National Coordination and Management Council asked the Petroleum Division to explore diversified suppliers. The instruction includes assessing the compatibility of crude oil with local refineries before closing any relevant purchase.
The Oil and Gas Regulatory Authority, in coordination with the Ministry of Information Technology and provincial stakeholders, was also tasked with mapping the oil supply chain. The goal is to create a centralized system that will allow for more accurate monitoring of data, inventories and distribution.
In doing so, Pakistan is attempting to move from an emergency response to a more orderly management of its energy imports. The crisis showed that relying on few routes and few suppliers can become an operational risk when the global market comes under stress.
A strategy to avoid longer outages
Finally, Pakistan’s search for alternative fuel combines energy urgency, geopolitical diversification and regulatory control. Russia, Nigeria and Venezuela appear as options to reduce exposure to the Gulf, while the LNG spot market offers an immediate but more costly outlet.
Still, the challenge will be to secure timely cargoes, maintain power system stability and prevent record premiums from adding to the pressure on households and industry. The evolution of Hormuz, LNG prices and the government’s purchasing capacity will set the pace of the response in the coming months.
Source: Pakistan Today
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