Weekly Brief | Week of March 23, 2026
Pakistan runs out of imported gas on April 14. Everything else follows from that.
SUMMARY
Qatar stopped sending LNG to Pakistan on March 2. The government told a Senate committee on March 16 that no liquefied natural gas will be available in the country after April 14.
Gas flowing to the power sector has already been cut by more than half, from 300 million cubic feet per day (mmcfd) to 130 mmcfd.
Diesel is up roughly 100% and petrol roughly 70% since March 7, the direct result of the US-Israel war on Iran shutting down roughly a fifth of the world’s oil supply through the Strait of Hormuz.
Pakistan gets 70% of its petroleum from the Middle East.
The country’s reserves stand at 11 days of crude, 21 of diesel, 27 of petrol.
Remittances are still arriving in force, $3.29 billion in February 2026, up 5.2% year-on-year, but more than half of that comes from Gulf countries now living inside an active war zone.
The base case for the next 30 to 90 days is a managed energy squeeze: rolling power shortfalls, electricity costs rising sharply if the government buys spot LNG at $24 per unit versus the $9 Qatari contract price, and food price pressure from fertiliser plant curtailments. Pakistan’s domestic solar and renewable growth offers partial relief for electricity generation. It does not cover transport fuel, aviation, or industrial gas.
WHAT CHANGED
The LNG supply is running out. Of eight cargoes due in March, two arrived. Six scheduled for April are not coming. Officials are now working the phones to Azerbaijan for spot supplies, but at $24 per unit versus $9 under the Qatari deal, every unit of gas Pakistan buys between now and whenever Hormuz reopens costs 167% more. That cost either goes onto the electricity bill or into the government’s fiscal account. Neither option is clean given where Pakistan’s finances sit.
The fuel price data from the Senate briefing tells a straightforward story. High-speed diesel moved from $88 to $187 per barrel since the war began. Petrol went from $74 to $130. OGRA confirmed diesel is up about 100% and petrol about 70% since March 7 alone. The government passed Rs55 per litre of this onto consumers. Petroleum reserves are thin: 11 days of crude, 9 days of LPG. If shipping disruptions run past 30 days without new supply arrangements, Pakistan moves from a price problem to an access problem.
Remittance numbers look good but uncertain as the conflict progresses. February’s $3.29 billion was up 5.2% year-on-year, and the cumulative July to February figure of $26.5 billion is up 10.5% from the same period a year ago. The issue is where this money comes from. Saudi Arabia contributes 23.5% of FY26 remittances, the UAE 20.6%, and the rest of the Gulf another 9.5%. That is more than half of Pakistan’s foreign exchange lifeline coming from a region under active bombardment. A 30 to 40% sustained drop in Gulf-sourced remittances would cut monthly inflows by $500 to $700 million. A broader Gulf economic slowdown, in which oil firms suspend operations and construction projects freeze, would hit Pakistan’s external account harder than any single price shock.
Two quieter moves deserve attention. OGDC announced a new oil and gas discovery at Baragzai X-01 in Khyber Pakhtunkhwa on March 4, flowing 3,765 barrels of oil per day and 11.2 mmscfd of gas. The joint venture brings in PPL at 30% and GHPL at 5%. In a week defined by import disruption, a domestic production addition that extends OGDC’s reserve life is genuinely useful news. The second item is a policy proposal, not yet a decision: the Petroleum Division wants to retire Rs680 billion in gas circular debt (the accumulated unpaid bills in the gas supply chain) over five years by redirecting dividends from state-owned energy companies. PPL would contribute roughly Rs230 billion and GHPL roughly Rs200 billion under this plan. If it becomes policy before OGDC’s April 23 earnings call, investors holding these names for dividend income need to reprice that expectation now. HUBC, the power company most exposed to gas input costs, is already down 10.67% year-to-date, trading at Rs197.75. The market is telling you the fuel risk is real.
On the Afghan border, Pakistan declared open war on Afghanistan on February 27, struck Kabul on March 16, and accepted a fragile Eid ceasefire brokered by Saudi Arabia, Turkey, and Qatar on March 18. Nearly 66,000 people have been displaced inside Afghanistan. The UN's 2026 humanitarian appeal for Afghanistan stands at $1.71 billion but is only 10% funded. International donors, including the UK and UAE, have historically channelled aid through Afghan authorities whose ability to separate civilian funds from armed group logistics has been poor. The United Kingdom recently announced an additional £3 million (AFN 257 million) in humanitarian assistance to Afghanistan, aimed at supporting people affected by natural disasters and other shocks. If that pattern holds, aid flowing into Afghanistan right now could extend the conflict's duration and raise Pakistan's own defence costs, fuel bills, and security spending beyond what the border war already demands.
WHAT THIS MEANS NOW
People
Electricity bills will rise before they fall. Gas to the power sector is already down to 130 mmcfd from 300, and once LNG stocks run out on April 14, load shedding will increase. Diesel at double its pre-war price raises the cost of food transport, farming machinery, and everyday commuting. For the roughly 4.9 million Pakistanis working in Gulf countries, the near-term picture is not mass unemployment. Most are still employed. But Gulf businesses are slowing, and uncertainty is rising. Over the next three to twelve months, the workers most at risk are those in Gulf construction and lower-skilled services, the same sectors most exposed to project freezes when investment confidence drops.
Investors
OGDC and PPL sit on the right side of this energy shock. Rising oil prices increase the value of their domestic production, and OGDC’s Baragzai discovery adds a near-term production catalyst. OGDC holds Rs327 billion in cash and short-term investments alongside Rs501 billion in overdue receivables; the receivables remain unresolved, but the cash position is substantial. The dividend proposal is the watch item. If the Petroleum Division’s plan to redirect E&P dividends toward gas circular debt retirement advances to formal policy, the yield story for OGDC and PPL changes materially before earnings season. HUBC is the clearest risk in the listed space. A power company running on gas in a week when gas has been cut by more than half is not a hold-and-collect story right now. On FX and remittances, the February data is healthy and Eid will likely produce strong March figures. Investors with longer-duration Pakistan positions should stress-test their assumptions against a scenario where Gulf remittances soften through the second half of FY26, while the import bill stays elevated.
Businesses
Gas curtailment is not a future risk. It is happening now. Power sector gas is at 130 mmcfd. One fertiliser plant has had supply cut by 50%. Businesses on SSGC or SNGPL supply should plan for further cuts between now and mid-April, not a recovery. Any contract priced before March 7 that relies on fuel or energy inputs needs review; those inputs cost 70 to 100% more today. Exporters shipping through Gulf ports face war risk insurance premiums that could add 15 to 25% to freight costs, which adds an estimated $50 to $100 million per month across the whole export base. Fertiliser producers dependent on LNG feedstock face the sharpest input cost shift of any sector; at $24 per unit spot versus $9 contracted, production economics are no longer what they were in January. Businesses that use Afghan transit or the Iran corridor for Central Asian trade should treat both routes as closed for planning purposes.
Policy and development actors
The government is simultaneously managing a fuel supply crisis, a border war with Afghanistan, domestic sectarian tension, and a fragile IMF programme, with petroleum reserves measured in days, not months. The decision on spot LNG, whether to absorb the $24 per unit cost fiscally or pass it through to tariffs, will set the tone for the IMF programme’s fiscal targets this quarter.
Pakistan’s Strategic Mutual Defence Agreement with Saudi Arabia creates a political and military obligation which commits both states to treat aggression against one as aggression against both, with public statements from Pakistani officials like Deputy Prime Minister Ishaq Dar citing it as a reminder to Iran during recent Iranian strikes on Saudi soil. That clause has been invoked in the Iran context, where Pakistan used the pact to seek Saudi assurances against attacks on Iran and to limit Iranian retaliation, but no source spells out automatic troop commitments for the Afghanistan conflict, leaving obligations more about coordination and deterrence than direct intervention. The pact creates binding political and military expectation for both crises, exactly when Pakistan and Saudi Arabia face overlapping pressures from Taliban hostilities and Iranian strikes.
Field Marshal Munir is at the centre of crisis response, including a 20 March meeting with Shia clerics amid protests linked to Iran tensions and the Karachi consulate, which shows military leadership diverting bandwidth to domestic containment. On Afghanistan, the Eid ceasefire pause was secured after Saudi Arabia, Qatar, and Türkiye made direct requests to Pakistan’s leadership, with sources pointing to Munir as the key contact for Gulf mediators, even if the back channel details remain opaque. That positions the Field Marshal as the fulcrum for de escalation talks, tying domestic stability to border management.
Afghanistan’s 2026 humanitarian appeal is $1.71 billion and only 10% funded. With the Pakistan border closed and the Iran trade route under strain, delivery routes for assistance are narrowing fast. For multilateral partners, the combination of energy shock, security costs, and humanitarian strain in a single country at the same moment makes Pakistan another acute stabilisation case in the region this week.
WHAT TO WATCH NEXT WEEK
LNG cargo confirmation before April 14. If no cargo is secured in the next two weeks, the power sector faces a gas cliff rather than a gradual decline.
March remittance data from SBP, expected in early April. The anticipated Eid seasonal boost will likely produce a strong headline number. A flat or falling Gulf share during Eid season would be the first concrete evidence that Gulf employment conditions are already deteriorating.
Pakistan-Afghanistan ceasefire after Eid. Operation Ghazab Lil Haq has not been formally suspended. If fighting resumes at scale after Eid, Pakistan runs a border war alongside its energy crisis, with higher defence fuel costs, a closed trade route, and diverted government bandwidth. A durable ceasefire does not solve the energy problem but it removes one set of fiscal and operational pressures at a moment when Pakistan can barely afford the ones it already has.
POSTURE
For businesses, individual and sovereign investors, the signal is to tread carefully. Domestic E&P names with production upside, specifically OGDC and PPL, may offer a real hedge against the energy shock, but the dividend risk from the gas circular debt proposal and the deteriorating external balance make this a stock-picker’s market. It is not a broad Pakistan entry point for the next 30 to 60 days.
CONFIDENCE NOTE
Confidence is medium-high on the energy picture and medium on the remittance and security trajectories.
The LNG supply data rests on primary ministerial testimony to a Senate committee, specific cargo counts, a named date, and corroborating price data from OGRA.
The strongest rival view is that Pakistan's domestic renewable growth absorbs the LNG gap faster than the Senate briefing implied, producing a shorter and shallower power crisis.
Energy Minister Leghari made this point in the same week, citing solar, wind, nuclear, coal, and hydro capacity. That view does not survive the 300-to-130 mmcfd cut already in place. But it gains force if April domestic generation data shows faster switching than expected.
The main unknowns: whether spot LNG is secured before April 14; whether the Afghan ceasefire holds after Eid; and whether the circular debt dividend proposal becomes confirmed policy before the April earnings cycle begins.
Conclusion
The current conflict, which is pushing the world to an economic crisis not seen in years, will affect the Global South the most. Pakistan is buying fuel at prices it did not budget for, fighting a border war it cannot fully afford, and watching more than half of its foreign exchange lifeline sit inside an active conflict zone. The reserves are thin, the options are expensive, and the decisions being made right now, on spot LNG, on the ceasefire, on E&P dividends, will set the conditions for the next six months.
None of this is inevitable catastrophe. Domestic renewable growth is real. The Baragzai discovery adds to the supply side. Remittances have held. There is room to move. But that room narrows with each week the Strait of Hormuz stays closed, each day the Afghan border remains shut, and each aid package that reaches Kabul without accountability for where it goes next.
The gas clock started ticking this March. Watch what happens on April 14.
Until next week,
Syed Ali Shehryar
March 24, 2026.
Nothing here constitutes investment advice, nor a recommendation to buy, sell, or hold any asset. Consult a qualified financial advisor for decisions tailored to your situation.