The crunch could not come at a worse time for Pakistan, just as the heat rises ahead of the monsoon season, boosting air conditioner use and power demand
By Bilal Hussain, Tooba Khan and Stephen Stapczynski
Electricity has become a luxury for Mohammad Rizwan.
Over the past week, the 52-year-old has faced daily blackouts at his house in Lahore, Pakistan’s cultural capital. When he leaves for his office in the morning, there is no power. When he gets home, the electricity is still out. His kitchen gets piped gas only two hours a day, forcing the family to rely on expensive cylinders.
“These outages have taken us back to the stone age,” said Rizwan, who lives with his wife, mother and two children in a bustling, densely populated neighborhood near the city center.
Asia’s emerging economies have borne the brunt of the global energy crisis as a seven-week war in the Persian Gulf cuts off vital flows of oil and gas. Many will be left with economic scars long after shipments slowly resume.
Few, though, have felt the pain more acutely than Pakistan, which was already grappling with fragile public finances and a war with neighboring Afghanistan even before US strikes began.
The country has made itself an unlikely mediator in the West Asia, leveraging its close ties with Saudi Arabia, Iran, the US and China to provide communication channels. It has hosted talks in Islamabad — a diplomatic coup. But as those look set to resume, even negotiators in five-star comfort may well find themselves relying on generators.
Little over a week after the war began in Iran, Pakistan was already introducing austerity measures, such as closing shops and restaurants early, cutting back spending and encouraging civil servants to work from home. Prices shot up at the pump, and even the Pakistan Super League — its top cricket tournament — told fans to stay home.
The situation has only worsened since.
The main source of pain is simple enough — a shortage of liquefied natural gas, a vital power plant fuel that the country usually takes from Qatar, the world’s second-largest exporter. Between the closed strait and a drone attack on the giant Ras Laffan plant a month ago, the emirate has not shipped a single cargo in weeks.
The crunch could not come at a worse time for Pakistan, just as the heat rises ahead of the monsoon season, boosting air conditioner use and power demand.
Pakistan’s energy ministry has said that load-shedding — the term for planned blackouts — would be implemented in the evenings for two to three hours. Yet interviews with households and businesses across the country suggest that the outages are lasting far longer — in some districts, more than half the day. The Federation of Pakistan Chambers of Commerce and Industry has said that over recent days some industries are facing around eight hours of load-shedding, a heavy blow to local and export-focused manufacturing.
Factories report being forced to halt at night, while households are installing illegal pumps to try to extract more gas from pipes. Cellphone service towers are switching off, and diesel generators and batteries are flying off the shelves. Even many of the country’s solar panels — a success story — operate without a battery to keep costs down, and so rely on the grid for backup when the sun stops shining.
When global fuel supplies contract, richer countries typically pay up. The emerging world, meanwhile, just stops consuming — as happened in 2022, after Russia’s invasion of Ukraine triggered an earlier gas emergency. Four years on, history is repeating itself for Pakistan.
“If we buy expensive fuel, it will increase electricity prices and also put pressure on foreign exchange,” Energy Minister Awais Leghari told a press briefing on Thursday. “If there is no gas, then there is a power shortfall and load-shedding.”
The crux of Pakistan’s problems is its continued dependence on LNG, used for generating electricity, running factories, fueling kitchens and producing fertilizer. With the crisis, it has been forced to choose “between producing electricity or giving it to fertilizer sector, keeping a keen eye on food security too,” said Khalid Waleed, an energy expert at the Sustainable Development Policy Institute.
The country began to shift its energy mix toward the super-cooled fuel a decade ago, when domestic production dropped. Then came a post-Covid boom in energy consumption that coincided with the Russian crisis and a spike in European gas prices. Suppliers cut off Pakistan to supply richer clients, and the country was plunged into an economic crisis.
Ultimately it required a bailout from the International Monetary Fund, with conditions that included increasing the price of electricity and gas for households and businesses.
Sales of solar panels surged in the aftermath, as families and factories looked at ways of cutting dependence on the expensive electricity from the grid — a far larger proportion of monthly outgoings for Pakistani families than for those in regional neighbors like India. That has helped cut gas imports, but not to zero. Last year, LNG still made up close to a fifth of the power mix.
When the US and Israel began strikes on Iran, prices rose and gas shipments began to slow, and the government initially saw a blessing in disguise. The country did not need all the supply it had agreed to buy from Qatar, and here was an excuse to stop purchases. But with nothing arriving at all, LNG has begun to run out, and alternatives — like domestic production — have struggled to fill the gap.
According to the government, Pakistan needs LNG every time power demand rises above 16,500 megawatts. Due to rising heat and a drop in hydropower output, that has been happening on a near-daily basis over the past week. Every 500 megawatts that it goes above that level translates into an hour of load-shedding.
At several points last week, demand topped 18,000 megawatts.
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Inevitably, some areas have been harder hit than others. From next month, though, even Karachi — the country’s biggest city, which has avoided the worst of the blackouts — will face load-shedding.
Umar Daraz, a school teacher in the city of Mian Channu in Punjab province, said the area was facing blackouts for the first time since about 2018. “Power outages are happening hour after hour,” he said.
Ufone, one of Pakistan’s largest mobile network operators, has warned that service will be disrupted because power is being halted for periods of more than eight hours. “These systems require a minimum of three to four hours of uninterrupted electricity supply to fully recharge the backup battery banks,” the company said. “The current pattern of frequent electricity outages is disrupting charging cycles and reducing backup capacity at our cell sites.”
Manufacturers and small businesses describe the combination of higher fuel prices and blackouts as a “death knell.” For Pakistan’s cricket teams and their fans, whose season runs until early May, weeks of empty seats mean that disaster has already arrived.
“Pakistan doesn’t have many events. The month-long Pakistan Super League is huge for Pakistan’s economy, it boosts tourism in cities like Peshawar and Multan when we have matches there,” Javed Afridi, owner of the Peshawar Zalmi franchise, said earlier this month. Merchandise sales were down 40%.
“It feels like we are back in the Covid era,” he said.
