Industrial Decarbonization Monitor Q3 2026: Pakistan’s Energy Security and Industrial Decarbonization Amidst the Strait of Hormuz Crisis
Reserve data show why the decline is not cyclical. The Energy Planning and Resource Centre (EPRC) of the Ministry of Planning reported original recoverable gas reserves of 63,311 billion cubic feet (BCF) and a balance of 20,951 BCF by 2021, so about two-thirds of the recoverable resource has already been produced [3]. If current trends persist, EPRC projects output falling to roughly 2,306 MMCFD by 2030. The Economic Survey 2025-26 adds that the country has made no significant discoveries and has therefore leaned on imported LNG for power and industry [2]. The Survey reports average consumption of 2,929 MMCFD in July–March FY2026, including 613 MMCFD of RLNG, down 6.8% from 3,143 MMCFD a year earlier. The fall came from RLNG (−23.2%) and general industry (−28.7%), while household and fertilizer use were almost unchanged. Power takes 31.5% of gas, households 26.4% and fertilizer 26.1% (Figure 3; Table 5) [2]. The Survey puts indigenous gas at 29.3% of primary energy supply in FY2026; the 35–38% used in this assessment is a broader basis.
Key Points
- 1Domestic gas output has fallen from about 4,259 MMCFD in FY2012 to roughly 2,840 MMCFD in July to March FY2026, and about two thirds of recoverable reserves have already been produced. The peak winter structural deficit is estimated at 1.5 to 2.0 BCFD.
- 2All LNG enters through two FSRUs at Port Qasim (1,200 MMCFD nameplate), and Qatar and the UAE supply about 99% of it. With no strategic underground storage, pipeline linepack gives a buffer of less than 24 to 48 hours.
- 3The Hormuz scenario became an operating reality on 28 February 2026. Regular Qatari deliveries stopped in mid July, spot cargoes cost about US$20.70/MMBtu, and kerosene and jet fuel prices more than doubled within four weeks. Each US$1/MMBtu adds roughly US$0.35 billion a year to the LNG bill.
- 4Industry is already switching fuels: general industry gas use fell 28.7% and industrial petroleum use 42.6%, while industrial grid demand rose 24.3% and coal use by cement and brick kilns rose 62 to 94%. Industry now has less dual fuel capability and leans on a grid that shares the LNG exposure.
- 5Effective electricity costs exceed Rs45 to 60/kWh for many consumers after taxes and surcharges, while solar export buyback has fallen to about Rs8 to 11/kWh. On site self consumption and storage now pay better than exporting to the grid.
- 6NEPRA’s binding 7 September 2026 decision lifted the B4 wheeling floor from the proposed Rs9.92/kWh to Rs12.32/kWh on the auction route and set Rs28.68/kWh outside it. Cross subsidy makes up 56% of the B4 grid charge, and the modelled saving against grid supply has narrowed to about Rs0.94 to 5.34/kWh. The first auction is now 400 MW, and ISMO’s Draft RFP ties the BESS minimum to 10% of the facility’s own firm capacity.
- 7Biomass boilers at KTML (20 TPH) and STML are helping mills move off coal, but only about 40 to 54 Mt of the roughly 112 Mt of crop residue produced each year is realistically available for energy. Wheat straw prices nearly doubled before the CCP urged a ban on burning it as fuel. By products first, stack controls and supply side MRV keep biomass claims credible.