Pakistan’s RLNG disruption may carry significant, under‑recognised benefits: billions of dollars in avoided imports, a feasible shift from RLNG to domestic natural gas, and the potential for lower energy purchase prices that could ease chronic merit‑order violations.

However, this also underscores the need for more sophisticated demand forecasting that fully incorporates solar generation and evolving consumption patterns.

To understand the current supply crisis in the wake of US‑Israel aggression against Iran, it is essential to situate it in a longer context. RLNG had already become problematic before the war: overcommitted long‑term contracts, repeated merit‑order violations, a supply chain shaped by institutional interests rather than demand, and a shrinking gas market.

The Qatar Energy force majeure did not create these vulnerabilities; it made them visible. The concern is that the disruption is being used to justify a large‑scale pivot to coal — an expensive and hard‑to‑reverse choice.

The war did not create Pakistan’s gas crisis; it interrupted a system already under strain

RLNG’s rise was tied to a configuration of local energy conglomerates, multilateral finance, and fast‑tracked import infrastructure, which moved on exaggerated assumptions about local gas’ scarcity. The result was a value chain whose costs were socialised while its contractual rigidities were protected.

RLNG‑based power plants failed to justify the model built around them. They did not consistently run at full capacity, repeatedly disrupted economic merit order, and helped lock the system into expensive generation. The problem lies in the structure of long‑term power purchase arrangements and take‑or‑pay gas supply agreements that make economically irrational dispatch appear institutionally normal. In 2025, RLNG’s usage in power went up from a reference range of 5.2 per cent to an actual 21pc of generation — a clear indication of its excruciating burden on the system.

The production numbers are revealing. In FY25, the system received around 2,890 million cubic feet per day (mmcfd) of natural gas and 957 mmcfd of LNG, while only 135 mmcfd of new local production was added. At the same time, roughly 400 mmcfd of wellheads were foreclosed or placed under revivability work. This strongly suggests that a significant part of the supposed RLNG necessity was maintained by suppressing local gas.

Gas demand destruction was already underway before the current regional disruption. Higher tariffs, International Monetary Fund‑linked restructuring, solar uptake, and shifts in captive and industrial consumption had begun changing the demand base. Mid‑summer sectoral allocations on the Sui Northern Gas Pipelines Limited’s (SNGPL) network in FY26 were lower than in FY25, and the year‑on‑year demand profile shows FY26 consistently below FY25, including the critical winter period. In the face of persistently declining demand, long‑term import commitments cannot be defended as prudent planning.

Furthermore, the federal cabinet approved the diversion of 24–29 surplus Qatari cargoes in 2026 under the Net Proceeds Differential (NPD) arrangement — roughly a quarter of annual long‑term contracted volume. Earlier, five Qatari cargoes had already been deferred from 2025 to 2026. SNGPL and Pakistan State Oil projected around 177 surplus cargoes between July 2025 and December 2031, averaging around 24 per year.

Additionally, the Oil & Gas Regulatory Authority (Ogra) approved Rs6.1 billion for SNGPL and Sui Southern Gas Company Limited (SSGC) for new RLNG‑based domestic connections under their FY26 petitions: SNGPL was to offer 300,000 domestic RLNG connections, and SSGC, 50,000. Even after diverting roughly 22pc of committed volumes under the NPD arrangement, the state still did not know what to do with the remaining RLNG. These realities are evidence of a structural glut.

SNGPL remains the main RLNG consumer, concentrating the crisis in northern geography rather than spreading it evenly across the national system. On SNGPL’s network, the power sector reportedly consumed only around 327 mmcfd of RLNG on 16 July 2025 against a target of 600 mmcfd. Export‑sector consumption also fell sharply because of high costs. When this under‑utilisation is connected to reports of 400 mmcfd of local gas curtailment, the perversity of the arrangement becomes impossible to ignore: imported gas retained contractual protection while domestic gas bore the shock.

Ogra’s own determinations point to significant declines in sales volumes, while large industrial users are increasingly adopting captive renewable power at scale. Many industrial and textile consumers that once relied heavily on imported RLNG are no longer reliable anchors for future demand.

Declining gas demand, increased domestic gas availability, and already‑documented surpluses suggest that the present force majeure is also a moment that exposes systemic irrationalities and creates room for correction. Therefore, calls to replace disrupted RLNG with fresh imported or local coal should be treated with caution. Coal brings its own rigidity. Pakistan’s power demand often rises sharply over short evening intervals, and such fast ramping may not sit easily with coal‑based generation.

The war did not create Pakistan’s RLNG crisis. It interrupted a system already strained by overbooking, distorted dispatch, suppressed domestic gas, and demand that had begun moving elsewhere.

Muhammad Abdurrafe works at Alternative Law Collective.
Email: mabdulrafe@gmaill.com.
Kamran Khosa works at Climate Action and Energy Access. Email: kamrankhosa@gmail.com

Published in Dawn, The Business and Finance Weekly, May 4th, 2026