Pakistan's Energy Crisis Shifts from Supply Risks to Affordability Woes

Pakistan's energy crisis has evolved from concerns about supply risks to affordability issues, according to a report by the Institute of Cost and Management Accountants of Pakistan (ICMAP). The country is struggling not only to secure liquefied natural gas (LNG) supplies but also to obtain fuel at prices that households, businesses, and the economy can afford.

The report, titled 'LNG Supply Shock -- From Contract Disruption to Energy-Cost Pressure', highlights the impact of geopolitical disruptions in 2026 on Pakistan's LNG outlook. Earlier concerns about an estimated $5.6 billion LNG surplus gave way to an acute supply squeeze, forcing the country back into an increasingly expensive global spot market.

Between March and September 2026, Pakistan secured only 17 LNG cargoes, including 10 under long-term contracts and seven from the spot market. This represents a fraction of its typical import requirements, resulting in severe financial impacts. The country's spot LNG procurement costs climbed from around $18.4 per mmBtu in April to $21.88 per mmBtu in July 2026, the highest spot price paid since the 2022 global energy crisis.

The consequences of the crisis have spread across the energy sector. LNG-based electricity generation costs increased from Rs21.73 per unit in August 2025 to Rs45.93 per unit in August 2026, an increase of more than 111% in a year. Overall power-generation costs also rose by nearly 38% year-on-year, adding pressure on electricity tariffs, public finances, and the energy sector's circular debt.

The report emphasizes that temporary measures alone cannot insulate Pakistan from future shocks. It calls for a more resilient energy strategy built around supplier diversification, greater contractual flexibility, stronger demand forecasting, strategic fuel reserves, and accelerated investment in domestic energy resources, including hydropower, renewable energy, nuclear power, and indigenous fuels.