Pakistan and Bangladesh are rationing gas as buyers across South Asia seek alternative fuels after spot liquefied natural gas (LNG) prices surged to record highs, Reuters reported quoting government and industry officials.
Spot LNG prices have almost tripled since early November 2020 as a steep fall in temperatures across North Asia increased demand multi-folds and depleted inventories.
Since July 2020, prices have increased by ten folds (1,000 percent).
Power Division Planning to Ban Gas Supply to Industrial Units
Pakistan is even more reliant on spot LNG imports for its winter needs than other countries in the region. The shortage of gas and increase in price has limited the gas usage for the industry to certain hours. Industry executives have warned that the situation has become critical, said Reuters’ report.
The recent power blackout in the country was partly caused due to gas shortage after buyers who snapped up record-cheap LNG earlier in the year balked at paying up during the recent price surge.
In Bangladesh, the government has cut gas supplies to power plants due to lower electricity demand during winters while maintaining steady gas flows to industries, a senior official at the state-run Petrobangla informed.
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In India as well, Reliance Industries, operator of the biggest refining complex in western India, has almost halted LNG imports and switched to cheaper alternatives, Reuters quoted Indian industry sources.
South Asia has been a critical growth market for LNG, with imports by India, Pakistan, and Bangladesh climbing 8 percent in 2020 to a record 50.48 billion cubic meters (BCM) despite the pandemic’s pressures on the region’s economies. That growth rate was second only to China’s 11.5 percent expansion in LNG imports in 2020.
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