It’s more than a month since the Russia-Ukraine war is going on, which has now resulted in a major spike in global oil prices as Russian oil in under sanction. While the other major oil producers including Iran and Venezuela are also facing sanctions in selling petroleum.
Amidst this crisis, to reduce the fuel consumption, the Nepal government is considering to declare a two-day holiday in public sector offices this month, as the country battles a foreign exchange crisis and the price of petroleum products are raising everyday.
While on the other hand, Pakistan is also struggling to procure fuel from the spot market after prices of liquefied natural gas and coal surged to records last month as the Russia-Ukraine war has exacerbated supply shortfalls.
Pakistan govt is cutting electricity to households and industry as the cash-strapped country can no longer afford to buy coal or natural gas from overseas to fuel its power plants. Pakistan’s energy costs more than doubled to $15 billion in nine months ended February from a year earlier, and it isn’t able to spend more on additional shipments.
About 3,500 megawatts worth of power capacity had been shut due to the fuel shortages as of April 13, according to a Twitter post by Miftah Ismail, who has been selected as finance minister by new Prime Minister Shehbaz Sharif. A similar amount is offline due to technical faults, he said. The more than 7,000 megawatts represents almost a fifth of total generation capacity, according to Tahir Abbas, the head of research at Arif Habib Ltd. in Karachi.
“Pakistan’s situation will not change in the near term since global dynamics are still the same,” said Samiullah Tariq, head of research at Pakistan Kuwait Investment Co. “There have been forced outages to deal with the energy shortages”, he further added.
A relatively poor nation that’s highly dependent on energy imports, Pakistan has been hit especially hard by rising fuel costs. The electricity crunch is complicating the already tough economic challenge for new Prime Minister Sharif who has yet to appoint an energy minister after former PM Imran Khan was ousted last week following a period of political turmoil.
