Gas Supply to Power Sector Set to Rise

Domestic natural gas allocations to the power sector in Pakistan are projected to increase to approximately 160–170 million cubic feet per day (mmcfd) by the end of April or early May, compared to the current supply level of 85–90 mmcfd. This adjustment forms part of government efforts to mitigate shortages of imported LNG and address rising electricity demand during the summer season.

According to official sources, measures are being implemented to divert additional gas volumes, including an estimated 20–25 mmcfd from the compressed natural gas (CNG) sector, while maintaining supply to fertiliser plants due to concerns regarding urea availability and pricing disparities between domestic and imported products.

The development follows warnings issued by the Power Division that failure to enhance gas supply could result in significant increases in electricity tariffs or elevated levels of loadshedding. Proposals under consideration include reallocation of gas from residential consumers, the CNG sector, and fertiliser plants; however, such measures carry potential political sensitivities, particularly given the impact on over seven million domestic users.

Authorities have indicated that uninterrupted gas supply to fertiliser plants may not be sustainable, with operational adjustments, including seasonal scheduling, being considered to balance demand.

The Power Division further noted that the Fuel Cost Adjustment (FCA) stood at Rs1.42 per unit for February and could have exceeded Rs2 per unit in the absence of reliance on furnace oil and re-gasified liquefied natural gas (RLNG). It has cautioned that FCA levels for May may increase substantially if reliance on furnace oil intensifies, particularly given that furnace oil prices have more than doubled since February.

The matter has been escalated to the National Coordination and Management Council for strategic oversight of electricity supply and allocation to priority economic sectors.

In the absence of RLNG, approximately 5,000MW of high-efficiency power plants in Punjab may become economically unviable, as generation costs rise significantly when alternative fuels such as high-speed diesel or furnace oil are utilised, with cost differentials ranging between Rs20 and Rs54 per unit.

Additional gas supply has been facilitated through infrastructure enhancements, including the commissioning of a pipeline connecting the Bettani gas field to Punjab, along with other system upgrades.

Loadshedding has already been implemented for at least two hours in recent days and is expected to intensify, particularly during nighttime hours when solar generation declines and grid demand increases.

Demand management measures have also been introduced, including early closure of markets, to reduce overall energy consumption.

Hydropower generation remains subject to uncertainty despite improved water availability, with delays in operational readiness of tunnels at Tarbela Dam and the continued outage of the 969MW Neelum-Jhelum Hydropower Plant constraining supply capacity.

Furnace oil continues to serve as a fallback fuel source, with existing inventories exceeding 500,000 tonnes—sufficient for over 35 days—albeit at significantly higher generation costs.

Peak electricity demand during the summer season is projected to reach 27,000–28,000MW, compared to current peak levels below 14,000MW, partly reflecting increased reliance on solar energy systems.

Officials anticipate that average daily loadshedding will remain in the range of two to three hours, alongside continued implementation of demand-side management measures.