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Managing Pakistan's RLNG Exposure: Declining Dispatch, Rising Financial Risk

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  • Rubina Ilyas

    (Pakistan Institute of Development Economics, Islamabad)

Abstract

EXECUTIVE SUMMARY: The RLNG challenge for Pakistan has evolved from a generation issue into a broader financial and fiscal risk. While RLNG generation is decreasing because of subdued demand from the grid, increasing tariffs, and fast growth of solar, the power sector is still vulnerable to long-term contracts, fixed capacity obligations, and external price shocks. RLNG still accounts for around 21 percent of total generation and 31.56 percent of thermal generation, while Pakistan remains committed to approximately 6.75 MTPA of contracted LNG supply. LNG import payments of US$3.52 billion, RLNG-linked capacity payments of 8.1 percent, and estimated tariff impacts ranging from PKR -0.29 to PKR 1.61 per kWh illustrate that declining dispatch does not automatically reduce financial exposure. This Policy Viewpoint, therefore, recommends a risk-management approach focusing on enhanced monitoring, least-cost dispatch, greater contractual flexibility, and the transparent disclosure of tariff, circular-debt and fiscal risks associated with RLNG.

Suggested Citation

  • Rubina Ilyas, 2026. "Managing Pakistan's RLNG Exposure: Declining Dispatch, Rising Financial Risk," PIDE Policy View Point 2026:66, Pakistan Institute of Development Economics.
    • Handle: RePEc:pid:pviewp:2026:66
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