Pakistan has failed to buy LNG from international markets in its first attempt in around a year as suppliers have not responded to the cash-strapped country’s tenders to purchase six shipments for October-to-December delivery.
Bloomberg cited traders with knowledge of the matter to report that several overseas banks weren’t accepting letters of credit — a pledge by a lender to repay funds if the buyer can’t – from Pakistani counterparts to purchase LNG, making suppliers reluctant.
The first bid closed Tuesday with no response. The second has time till July 14.
Pakistan’s economy has been struggling with a depreciating currency, political turmoil and increased risks of foreign-debt default. Its inability to buy gas will aggravate energy shortages, increase blackouts and limit supply of industrial fuel.
Pakistan’s energy crisis was fuelled by Russia’s invasion of Ukraine last year due to its high dependence on imports. Several LNG similar tenders last year had also failed to draw suppliers.
The IMF recently criticised the Shehbaz Sharif-led coalition government’s budget as insufficient to meet the goals of its bailout programme, a sign that a deadline this month to unlock the global multilateral lender’s funds will not be met.
PM Sharif had in a last-ditch effort recently reached out to nearly a dozen influential global capitals to sensitise them about Pakistan’s efforts to revive the stalled $6.7-billion bailout amid wide gaps between Islamabad and the IMF over budget 2023-24 figures.
