Energy crisis: Minister says gas supply bigger concern as winter approaches

As the country faces challenges in arranging fuel supplies and managing demand, Petroleum Minister Pervaiz Malik has said that the government’s main concern in the current energy situation is the gas sector as winter approaches.

Speaking on a private news channel’s programme, Malik said that the government was preparing for the situation and would work to ensure supplies, but the gas sector posed a bigger challenge because demand would rise during the winter months.

“The bigger concern I have right now is the gas sector,” Malik said, pointing to the approaching months of December, January and February as well as Ramzan, when demand for cooking and heating fuel would increase.

He said Pakistan is also facing difficulties in securing LNG cargoes from Qatar. According to Malik, if a $30 million cargo from Qatar will not come out, Pakistan would need to arrange a cargo worth $100 million.

“How do I rationalise the demand within that, how do I meet that demand, who to give to, who not to give to, wargaming is underway,” he said.

Malik said that the government would work to ensure fuel availability even if it faced some pressure on prices.

Responding to journalist Mohammad Malick’s question about the possibility of gas prices increasing if international oil prices continued to rise, Malik added that the government had flexibility in the gas sector because it could recover the cost of cargoes over the course of a year.

“Nothing will happen,” Malik said when asked whether gas prices could rise by 10, 20 or 25 percent in the worst-case scenario.

He said that if cargoes were brought through Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL), the government could recover the cost over the entire year.

“We will try to remain within the pricing framework, so that we don’t burden anyone, but we must make fuel available,” Malik said, adding that ensuring availability was the challenge.

The government has increased the price of petrol by Rs4.10 per litre and High-Speed Diesel (HSD) by Rs6.41 per litre, with the revised rates taking effect from September 16.

Petrol now costs Rs384.34 per litre while HSD is priced at Rs415.83 per litre. The government continues to collect Rs114 per litre in taxes and duties on petrol and Rs100 per litre on diesel, according to a notification by the Petroleum Division.