Thousands of kilometers away, a catastrophic war erupts as Iran, the United States, and the entire Middle East collide in a devastating spiral of violence. The missiles aren't fired at Pakistan, but make no mistake: 260 million Pakistanis are directly in the crosshairs. From the quiet homes of Azad Kashmir to the crowded kitchens of Lahore, Islamabad and Peshawar, families light their stoves only to realize the real cost of this war is already inside their homes. Empty gas cylinders. Unaffordable flour. Shuttered factories. A silent, terrifying economic execution is underway and Pakistan’s poor are being crushed first.

Since war choked the Strait of Hormuz in late February, the IEA has called this the worst energy security crisis ever. Global physical crude prices surged, a crippling cost imposed on Islamabad by world markets beyond its control. Pakistan sourced 99% of its LNG imports from Qatar under term contracts. When Iran struck Qatar's Ras Laffan facility on March 2, Qatar Energy declared force majeure two days later, and cargoes became hostage to a waterway we do not control. Pakistan received only two Qatari cargoes this October, against eight a year earlier. Engro's terminal has been shut since September 26 for lack of vessels, and the GasPort terminal has been idle since October 9. Spot purchases have cost over $1 billion, power shortfalls have reached roughly 3,400 megawatts, and winter heating demand is weeks away.

This was a policy choice, not an accident. Global LNG was shifting toward gas-to-gas pricing linked to Henry Hub. Pakistan tied itself to long-term, oil-indexed Qatari contracts priced off Brent, reported at around 13.37 per cent when signed, and added import terminals with take-or-pay obligations. IEEFA found that rigid long-term contracts and thin storage left Pakistan with surplus gas it could not absorb even before this war. We managed to be oversupplied and starved on the same contract. Officials are now working diplomatic channels with Qatar, Iran........

© The Friday Times