Naveed Qamar did as Raja Pervez Ashraf earlier this week in saying there would be no electricity load shedding in the country. He instead went a step ahead, as Raja back in 2009 had promised to put an end to the load shedding giving a six-month timeframe; the Power Ministers statement now implies that it will be effective immediately. Without any doubt, this will not happen as the structural issues in the energy sector particularly those in the power sector still remain largely unaddressed. Agreed! There might be a respite for a short while as the demand in the winter season has remained sluggish and the hydro-power generation is expected to increase following the heightened water levels in the dams. But, making public statements such as this one speaks of the naivety that seems to have set in the governments camp. Such attitude of complacency hints that the authorities at the helm of affairs either do not have the foresight or do not understand the gravity of issue at hand. It will only be a matter of a few months, before the power load shedding again becomes the headache for one and all - from consumers to the government. Tricky times await the government as the summers approach. International crude oil prices are expected to stay above $100/bbl, which would mean further rounds of power tariff increase. Given the nature of power mix that is heavily tilted towards thermal-based power generation, passing on the fuel cost would be critical to ensure that power generation companies function smoothly. But, if history is any guide, governments track record in this regard has not been one to boast of. Four years in a row, the government has massively surpassed the allocated subsidy amount for the power sector, which necessitates from the inability to rationalise the tariff. The government would be brave to take rational steps in this direction especially when general elections are fast approaching - and succumbing to the political pressures would only mean added pressure to the power sector. The IMF, in its latest statement on Pakistan, has also highlighted that the unresolved structural changes in the energy sector have contributed towards the vulnerability of the economy. The structural changes in the system need to go beyond merely revamping the boards of discos. The current state of power infrastructure leaves a lot to desire. The energy crisis alone cost Pakistan nearly 2 percent to the GDP growth - Pakistan can ill afford energy crisis to be a permanent stumbling block. Merely injecting money and converting the circular debt stock into TFCs have not worked in the past and will not work in the future as well. The core issues need to be addressed add it should not require an IMF statement to state the gravity of the problem. The focus needs to be on rationalising tariffs, reducing theft and line losses, revamping the billing collection mechanism and improving the power mix rather than making hollow promises to the nation which would eventually result in the Minister eating his words.
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