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Gas crisis to aggravate as supplier refuses to deliver LNG cargo

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  • ENI to not deliver February’s cargo purchased at cost of 12.14%.
  • This will result in reduced supplies to power sector.
  • End consumers to get costly electricity. 

ISLAMABAD: Pakistan is expected to witness an aggravating gas crisis in February as an Italy-based LNG trading company, ENI, intimated that it will not be able to deliver its term LNG cargo due on February 6-7 by claiming the force majeure, The News reported Monday citing a senior official of the Energy Ministry.

“The gas deficit will soar as imported LNG will reduce to 700mmcfd as only five cargoes, at the price of 13.37% of Brent, and 2 cargoes, at 10.2% of Brent under GtG agreements with Qatar, would be available in February. There will be no LNG cargo from ENI at the cost of 12.14% in the month of February. And this will increase the gas crisis in the country.”

The news has disturbed the top mandarins of the Petroleum Division as the country is already facing an acute gas crisis. The crisis has been affecting domestic users in some main cities, with little to no pressure.  

The government under its gas load management plan promised gas supply to domestic consumers for cooking times in winter — three hours in the morning from 6am to 9am, two hours from 12 noon to 2pm for lunch, and three hours from 6pm to 9pm for dinner. The ground realities speak otherwise.

Relevant authorities say the impact of ENI backing out will come in the shape of reduced supplies to the power sector and the projected supply of 325mmcfd to the sector next month will not be available. 

The reliance on furnace oil-based electricity will increase and end consumers will get costly electricity. The captive power plants will be supplied gas at 50% and supply to fertiliser plants, compressed natural gas (CNG) and local industry shall remain discontinued.

Earlier, the Petroleum Division had claimed that the ENI from January 2023 onward will not default but that is not the case.

When contacted, ENI spokesperson also confirmed the development, saying: “February delivery disruption is beyond the reasonable control of ENI and due to an event of Force Majeure. ENI does not benefit in any way from the situation.”

According to the senior official, ENI defaulted five times in 2022; it failed to provide LNG cargoes in the months of March, May, July, September, and November.

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Robust activity lets PSX climb above 115,000 level again.

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On Friday, the Pakistan Stock Exchange (PSX) resumed its upward trend, crossing 115,000 points once more.

The PSX had strong action in the morning session, as the KSE-100 index increased by 1,000 points to 115,138.

The notoriously volatile PSX closed Thursday at 114,037 points, up 594 points.

DOLLAR DEPRECIES

Meanwhile, in the interbank market this morning, the US dollar fell 7 paisas to Rs278.65 against the Pakistani rupee.

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SBP will announce monetary policy on January 27.

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The State Bank of Pakistan (SBP) will release its monetary policy on Monday.

The Monetary Policy Committee (MPC) of the SBP will convene on the first day of the following week to make decisions on monetary policy.

The Monetary Policy decision will be announced by Governor SBP Jameel Ahmad at a news conference on the same day after the MPC meeting, according to an official release.

In December, the central bank reduced policy rates by 200 basis points (bps) to 13 percent.

“In November 2024, headline inflation fell to 4.9 percent year on year, meeting the MPC’s estimates. This decrease was mostly caused by the ongoing decline in food inflation and the phasing out of the impact of the gas tariff increase in November 2023,” SBP stated in an official release.

“However, the Committee noted that core inflation, at 9.7 percent, is proving to be sticky, while consumer and business inflation expectations remain volatile.” To that end, the Committee restated its previous assessment that inflation may remain volatile in the short term before stabilizing within the target range.

“At the same time, growth prospects have slightly improved, as evidenced by a recent increase in high-frequency indicators of economic activity.” Overall, the Committee concluded that its approach of gradual policy rate decreases is keeping inflationary and external account pressures under control while promoting long-term economic growth.

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Finance Minister Meets With World Leaders at World Economic Forum in Davos

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During his attendance at the World Economic Forum in Davos, Switzerland, Finance Minister Muhammad Aurangzeb has met with officials of organisations and leaders of many nations.
Bangladesh’s Chief Advisor, Muhammad Younas, met with Mohammad Aurangzeb.
On the fringes of the World Economic Forum’s Annual Meeting 2025 Opening Banquet, there was an informal meeting.
Additionally, the Finance Minister met with Anwar Ibrahim, the Prime Minister of Malaysia.
Both leaders discussed economic cooperation and bilateral ties.
Muhammad Aurangzeb also had a meeting with Dp World’s Rizwan Soomro and Yuvraj Narayan.
They talked about how to strengthen Pakistan’s logistics and infrastructure systems to support trade.
“The Pakistani government is committed to advancing joint projects and values partnerships in both business-to-business and business-to-government cooperation,” the finance minister added.

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