Pakistan Pays Steep Premium to Secure Urgent LNG Supplies

State-run Pakistan LNG Ltd. finalized the purchase from BP at $16.74 per mmBtu, a significant markup compared to the $15 range typical for spot market trades. This transaction follows a period of intense volatility where several previous tenders yielded no results, as the state company rejected offers deemed prohibitively expensive. The reliance on this costly spot cargo highlights the vacuum left by the cessation of Qatari exports, a primary supplier that historically anchored Pakistan’s energy security.

The absence of consistent LNG flows has triggered widespread power outages and forced fuel rationing across the country. Economic instability compounded by these energy shortages pushed inflation to 11.7% in May, while core inflation surged by 9% year-on-year. Despite efforts to diversify, including a shipment from the United States in May at $18.40 per mmBtu, the country remains vulnerable to price spikes. Pakistan LNG recently issued another urgent tender for delivery between June 30 and July 4, reflecting a desperate need to stabilize domestic supply chains.