Pakistan needs to spend over $1 billion to secure liquefied natural gas (LNG) for the winter months. This increase in cost has occurred due to the surge in spot prices in Asian markets and disruptions in supply from Qatar.
Increase in LNG Prices in Asian Markets
LNG prices in Asian markets have reached their highest level in three years. The Pakistani government has decided to import 10 LNG cargoes from the spot market, while the price of these cargoes will be double the price of LNG imported from Qatar. These cargoes are scheduled for delivery between November 2026 and February 2027 to ensure the country's winter needs are met.
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Impact of Supply Disruptions from Qatar
Disruptions in gas supply from Qatar have forced Pakistan to turn to expensive purchases from the spot market. These disruptions stem from Qatar's declaration of force majeure last March due to Iranian attacks on LNG export facilities in Ras Laffan. Since then, Pakistan has been compelled to buy LNG from spot markets, which has increased electricity production costs.
The gas supply situation in Pakistan has been severely affected by the closure of the Strait of Hormuz. According to reports, the closure of this strait has led to a reduction of 0.4 million tons per month in LNG supply to Pakistan from March to November 2026. This has prompted Pakistan to reduce demand, switch fuels, and release stored domestic gas, resulting in a reduction of over 2.5 million tons in gas demand.
Experts say that Pakistan is currently the most vulnerable market in South Asia due to the lack of supply from Qatar. It is expected that the country will source 99% of its LNG imports from Qatar by 2025. Given the intense competition between Asian and European buyers in spot markets, prices have surged significantly, putting additional pressure on Pakistan's economy.
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