Pakistan has energy to last through November, no spot LNG unless 'dire need', Aurangzeb says

Pakistan has procured enough energy to last through November and will not buy expensive spot LNG cargoes unless there is an "absolute dire need", Finance Minister Muhammad Aurangzeb said on Saturday 17 October. He was speaking to AFP on the sidelines of the IMF and World Bank annual meetings in Bangkok, in an interview published by Dawn.

What Aurangzeb said

• First shock absorbed: global energy prices have surged since the US and Israel went to war with Iran in February, and Iranian retaliation has hit Gulf supplies. Aurangzeb said Pakistan handled the "first-order impact" well, with no shortages, no queues at fuel stations and no breakdown in law and order.
• Covered to November: enough fuel has been secured for the coming weeks; the government is now planning for winter, when household gas demand rises sharply.
• No spot LNG: spot cargoes cost far more than contracted shipments, and Pakistan will avoid them unless it has no choice.
• The worry: continued attacks on energy infrastructure. Even if fighting eases, he said, damaged infrastructure would delay a return to normal.

Why it matters to you

Winter is when gas runs short for homes in Punjab and Khyber Pakhtunkhwa and load-shedding schedules tighten. Avoiding spot LNG keeps the import bill down, but it also means less gas to go round if demand jumps in December and January. Brent crude touched $110 a barrel this week for the first time since May (our story), which feeds into power plant fuel costs and the monthly fuel adjustment on electricity bills.

That adjustment is already climbing: the power purchaser has asked NEPRA for Rs 2.56 a unit for September, to be charged in November bills (details). Petrol, meanwhile, was cut by Rs 3.93 to Rs 386.30 a litre from Saturday (our story); daily PSO readings are on the petrol price page.

Work out your own winter costs with the Sui gas bill calculator and the electricity bill calculator.

Taxes and the IMF

Aurangzeb said Pakistan has been on a path of fiscal consolidation for some time, as the IMF has urged. He said the government is going after businesses that collect sales tax from customers but never deposit it, which he called "theft" running into billions of dollars, and that there is "room for improvement" in income tax collection. Reforms face resistance from industry, lobby groups and vested interests, he said.

Pakistan is on a $7 billion Extended Fund Facility and a $1.4 billion Resilience and Sustainability Facility. A staff-level agreement reached earlier in October, after the fourth EFF review and third RSF review, would release about $1.2 billion once the IMF board signs off. On Friday Aurangzeb met World Bank President Ajay Banga at a dinner hosted by the Thai prime minister, PTV reported. Pakistan will chair the IMF and World Bank boards of governors in 2027 (our story).