Pakistan plans u-turn on fuel imports after prices surge

Pakistan will reverse a long-held strategy to import more fuels including liquefied natural gas and attempt to boost domestic energy sources.

The nation won’t build new power plants that rely on imported coal, LNG, or fuel oil over the next decade, according to an official at the country’s energy ministry. It will instead look to increase its domestic power capacity including solar, wind, locally-mined coal, hydro, and nuclear, said the official, who requested anonymity to discuss details that aren’t yet public.

A spokesperson for Pakistan’s energy ministry was not immediately available for comment

The country’s reliance on energy imports coupled with a financial crisis made it especially vulnerable to shortages exacerbated by Russia’s war in Ukraine. Unable to afford soaring LNG cargoes, it has suffered frequent electricity blackouts and has had to ration fuel.

Pakistan will boost coal-fired power capacity four-fold in the “medium term,” and no longer regards LNG imports as part of its long-term energy plan because of surging costs, Energy Minister Khurram Dastgir Khan told Reuters earlier.

The embrace of domestic coal is an abrupt shift for Pakistan, which decided over a decade ago to start importing gas to replace dwindling reserves at home. It began purchasing LNG from overseas in 2015, and for years was one of the fastest-growing markets.

Pakistan’s government has struggled to secure LNG in the spot market over the last few years because of rising prices and limited supply. The nation has also failed to sign long-term deals to ensure future deliveries, threatening years of shortages.