Government Implements Loadshedding and Updates Electricity Rates

 

Pakistan is preparing for a challenging summer characterized by daily electricity load-shedding and increased power tariffs as the government grapples with fuel shortages and surging generation costs. To address these hurdles, senior officials are developing a hybrid management strategy that combines scheduled power outages, mandatory energy conservation measures, and fuel cost adjustments to stabilize the grid during peak demand. This crisis is largely driven by a projected sharp decline in fuel availability, particularly liquefied natural gas (LNG), which typically accounts for over 21 percent of the country’s power generation but could drop to near-zero levels as early as next month. Furthermore, constraints on both imported and local coal supplies—which, along with LNG, represent nearly 30 percent of the national power supply—are expected to persist.

To bridge the resulting energy gap, the government may be forced to rely on furnace oil-based power plants during peak hours, despite their significantly higher operational costs. While generation from imported coal costs approximately Rs13.50 per unit and LNG costs around Rs20, furnace oil pushes the price to Rs35 per unit. Consequently, officials estimate that fuel cost adjustments could increase consumer bills by Rs10 to Rs12 per unit, particularly with the shutdown of four major LNG-based plants totaling 5,000 megawatts of capacity. High-speed diesel, which exceeds Rs80 per unit, has been ruled out as a viable alternative due to its exorbitant price and critical need in the transport and agricultural sectors.

As summer temperatures drive electricity demand toward 27,000–28,000 megawatts—nearly double the current demand of 14,000 megawatts—authorities anticipate an average of two to three hours of daily load-shedding. In addition to residential outages, gas companies have warned that limited supplies may necessitate suspending gas to the CNG sector to prioritize power plants. The situation is further complicated by logistical disputes between Pakistan Railways and plant operators in Sahiwal and Jamshoro, which have disrupted coal transport and threatened an additional 1,800 megawatts of generation capacity. Ultimately, if these fuel and logistical shortages are not resolved, consumers face a summer of both reduced service reliability and significantly higher electricity expenditures.