Pakistan Weighs Load-Shedding and Tariff Hikes as Fuel Shortages Threaten Summer Power Supply

By Shahzad Paracha :

Pakistan’s government is considering a mix of load-shedding, energy conservation measures and higher electricity tariffs to manage power demand during the summer, as fuel supplies face disruption amid the ongoing Middle East crisis.

Senior officials told Dawn that the Power Division is working on several strategies to balance rising electricity demand with limited availability of imported fuels such as liquefied natural gas (LNG) and coal, while also coping with sharply rising energy costs.

LNG shortages threaten power generation

Officials said LNG supplies which normally account for more than 21% of Pakistan’s electricity generation — could fall to nearly zero from next month, even if the conflict in the Middle East ends quickly.

Imports of coal, both local and foreign, are also expected to remain limited. Together, LNG and coal contribute close to 30% of the country’s electricity supply to the national grid.

With these fuels becoming scarce, authorities may rely more heavily on furnace oil-fired power plants to meet peak demand. However, this option comes at a much higher cost.

Cost of alternative fuels rising sharply

Government data shows that the fuel cost of electricity generation from imported LNG was around Rs20 per unit in February, while imported coal cost roughly Rs13.50 per unit. Local gas and coal typically generate power at around Rs12 to Rs14 per unit.

By comparison, furnace oil-based generation costs about Rs35 per unit, and prices have surged further following disruptions in the Strait of Hormuz and attacks on oil facilities in the Middle East.

Officials estimate that switching to more expensive fuels could increase the fuel cost adjustment by Rs10 to Rs12 per unit, although the final figure will depend on fuel availability.

Generation using high-speed diesel — which previously cost more than Rs45 per unit — has reportedly become even more expensive and could now exceed Rs80 per unit. Authorities say diesel-powered plants will not be used because of the high cost and the need to reserve fuel for transport and agriculture.

Load-shedding likely during peak demand

Electricity demand typically rises to between 27,000 and 28,000 megawatts during the summer months. Current peak demand remains below 14,000MW, partly because rooftop solar systems have reduced reliance on the national grid.

Given the supply constraints, officials expect average daily load-shedding of two to three hours, alongside compulsory energy conservation measures.

Additional costs are also likely to be passed on to consumers through the existing fuel cost adjustment mechanism.

Gas diversions under consideration

Gas utilities have indicated that only around 80 million cubic feet per day (mmcfd) of gas may be available for power plants.

About 150mmcfd of gas and LNG supplied to power stations in March will no longer be available from April. To offset the shortfall, authorities are considering suspending gas supply to the compressed natural gas (CNG) sector, which could free up 25–30mmcfd for electricity generation.

Gas allocated to fertiliser plants may also be partially diverted to the power sector.

Domestic disputes threaten coal supply

Officials also warned that internal administrative disputes could further reduce electricity supply.

Around 1,500 to 1,800MW of coal-based generation may be at risk due to disagreements between Pakistan Railways and two major coal power plants over the transportation of fuel.

Railway authorities have reportedly blocked coal loading for the Sahiwal power plant and failed to provide wagons for the Jamshoro facility.

Together, the two plants generate between 1,500 and 2,000MW from the current national output of roughly 14,000MW. Fuel stocks at both facilities are reportedly sufficient for only three to seven days.

If supplies run out, officials warned it could lead to an additional 2.5 to 3 hours of load-shedding.

The dispute also carries financial implications for Pakistan Railways, as the two plants account for more than 30% of its freight revenue.

Officials say the issue has been raised with Power Minister Awais Leghari and may require intervention from Railways Minister Hanif Abbasi or the Prime Minister’s Office.

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