LNG use in Pakistan falls 9% in first half as high prices curb demand

Pakistan's liquefied natural gas or LNG consumption declined 9% during the six months ended Dec 31 as high prices led to a reduction in gas usage and an increase in solar-based electricity generation.

LNG-fired electricity generation dropped to 11,639 GWh during July-December, down from 10,542 GWh in the same period the previous year, according to data released Monday from the National Electric Power Regulatory Authority, a state-run company that determines consumption and electricity prices generated through different sources.

LNG consumption in Pakistan has been declining primarily due to high prices, reduced industrial activity and rising shift of residential and industrial consumers to renewable energy-production through solar, said Ali Nawaz, chief executive officer at Chase Securities, a Karachi-based equities trading firm.

Additionally, lower demand from the power sector, especially during periods of improved hydel generation or mild weather, further decreased LNG use.

In December, electricity generation from LNG gas-fired plants dropped by 9% to 1,465 GWh compared with 1,615 GWh during the same period a year earlier, the National Electric Power Regulatory Authority data showed.

RLNG based power generation remained low in December as high LNG import prices under contractual obligations made RLNG plants uncompetitive, leading to lower utilization, Bilal Ejaz, research analyst at Karachi-based broking firm Ismail Iqbal Securities, said. "As a result, generation shifted toward relatively cheaper solar, coal and nuclear sources amid weak demand. Lower consumption by power plants has further dampened overall RLNG demand, leading to a glut in the pipeline system, resulting in curtailment of domestic natural gas production," Ejaz said.

In last three years, electricity prices for residential and industrial users have shot up by 55% to 75% forcing consumers to switch to renewable energy, especially solar power, government data shows.

Pakistan’s LNG consumption had dropped to 914 mmcfd in the fiscal year ended June 30, 2025, the lowest level in five years.

The share of RLNG in the country’s overall electricity production has been continuously falling. In the six months ended December, it declined to 15.7% from 17.5% in the same period of the previous year, the data said.

Overall electricity production in six months ended Dec 31 showed a paltry rise of 1.1% to 67,357 Gwh compared with 66,640 Gwh of the same period a year ago, the data showed.