Pakistan's Power Generation Costs Increase by 38% Due to Record Spot LNG Purchases Amid Middle East Supply Disruptions
Pakistan's power generation costs rose by 38% in July compared to the previous year, driven by record-high spot liquefied natural gas (LNG) prices. This surge is attributed to supply disruptions from the Middle East, specifically the renewed closure of the Strait of Hormuz and issues with regular shipments from Qatar, forcing Pakistan to procure LNG on the more expensive spot market. The country's reliance on a higher mix of re-gasified LNG (RLNG) and furnace oil, coupled with elevated oil prices, further contributed to the increased costs. Electricity generation also saw a 7% increase in July, reaching the second-highest level for any July month, with significant contributions from hydroelectric, local coal, and imported coal generation. Pakistan has been issuing multiple tenders for July and August delivery, indicating a willingness to pay premium prices to secure necessary supply. For instance, Pakistan LNG Limited accepted an offer for a spot cargo at $21.88 per million British thermal units (MMBtu) fo... 
