As European nations ramp up purchases of natural gas as an alternative to Russian pipeline supplies, poorer countries like Pakistan are finding it difficult to compete for the fuel due to high prices, Express Tribune reported.
Alongside other developing countries, Pakistan’s LNG imports have decreased by 15 per cent due to the buying up by European Union members, according to a Wall Street Journal report.
LNG price has skyrocketed 1,900 per cent from its tariff two years ago. The current prices are equivalent to purchasing oil at $230 per barrel, whereas it is usually sold at a discount as compared to oil.
Developing nations are unable to compete with Europe for the import at prices of nearly $40 per million British thermal units (MMBtu), the WSJ report cited Wood Mackenzie data, revealing that European nations have jacked up LNG imports by almost 50 per cent year-to-date through June 19.
Pakistani officials earlier said a tender from the country for around $1 billion of LNG received no offers on Thursday, Express Tribune reported.
Every day, businesses and homes are bearing hours of power outages as Pakistan can’t import enough LNG for the power plants, they added.
“Every molecule of gas that was available in our region has been purchased by Europe because they are trying to reduce their dependence on Russia,” Petroleum Minister Musadik Malik was quoted as saying in the report.
What’s worse is that in some cases, cargoes destined for poorer countries are sent to Europe instead.
According to experts, doing so is profitable even if the suppliers agree to pay penalties under contracts with developing nations.
The world’s supply of the natural gas used to produce power is scooped up by European countries, according to Valerie Chow, who heads gas and LNG research for Asia Pacific at the Wood Mackenzie.
“Emerging markets in Asia have taken the brunt of it, with no end in sight,” Chow told WSJ.