Power, Petroleum Ministries at Odds Over LNG

Pakistan’s energy landscape is facing growing confusion, as key ministries fail to work in coordination while pushing isolated solutions. At the center of the latest clash is the power minister’s push to renegotiate RLNG contracts with Qatar, hoping to mirror past IPP settlements.

The petroleum minister, however, has rejected the proposal outright, publicly stating that the Power Division is responsible for the gas supply defaults. He also reminded that the next scheduled revision of the Qatar LNG agreement is not due until 2026, making the proposal premature and diplomatically risky.

This tug-of-war adds to the complexity of an already overburdened energy sector, where unused RLNG volumes, reduced grid demand, and rising pipeline pressure continue to strain the system. Despite encouraging captive power users to switch to grid electricity, the Power Division has failed to increase RLNG offtake, leaving high-cost imported gas idle.

While the power minister defends his stance by referring to the economic merit order (EMO), critics highlight contradictions in his position. The Power Division had earlier enforced peak-hour levies exceeding IMF recommendations, raising questions over policy consistency.

Meanwhile, the Discos under his ministry have been accused of overbilling consumers by nearly Rs240 billion. Yet, the ministry has chosen to remain silent on the issue, despite growing public discontent.

Energy analysts say that pressuring a sovereign partner like Qatar could send the wrong signal to international markets and might repeat the backlash seen during earlier coercive negotiations with local IPPs. Notably, similar tactics failed to yield results with Chinese IPPs, which refused to waive late payment charges.

Source Link: Business Recorder