Pakistan fails in its first attempt in a year to buy gas in hit to economy

Pakistan failed in its first attempt in about a year to buy liquefied natural gas from the spot market, with no suppliers of the power-station fuel offering cargoes.

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No companies responded to Pakistan LNG Ltd.’s tender to purchase six shipments for October-to-December delivery, which closed on Tuesday, said traders with knowledge of the matter who didn’t want to be named as they aren’t authorized to speak to media.

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 shipments, making suppliers reluctant to offer cargoes, Bloomberg reported last week.

The South Asian nation is struggling with a weakening currency, political turmoil, and an increasing risk of a sovereign default.

The International Monetary Fund recently criticized the government’s budget as insufficient to meet the goals of its bailout program, a sign that a deadline this month to unlock aid will not be met.

Pakistan’s inability to buy gas will aggravate energy shortages in the country, increasing the frequency of blackouts and curbing the supply of fuel to industrial consumers.

The nation was hit hard by the energy crisis spurred by Russia’s invasion of Ukraine last year due to its high dependence on imports. Several similar tenders by Pakistan last year also failed to gain offers from suppliers.

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