The country needs an energy czar

Dr Asim Hussain has been reappointed as Advisor to the Prime Minister on Petroleum and Natural Resources, subsequent to his unopposed election from the Senate. But this time he has power to order evil spirits out of oil and gas business! This impression was strengthened by Dr Hussain himself who, in his maiden press conference, announced the summary dismissal of all heads of public sector entities in the oil and gas sector, with an assurance that advertisements to fill the vacated slots of managing directors (MDs) to ensure transparency would be issued very soon.
The critics of this appointment question the credentials of a medical professional for this post. However, they conveniently overlook the fact that present challenge is essentially a managerial one, requiring full political-backing to help deliver energy to users in the most efficient manner.
For an energy-deficient and poor country, facing immense shortages, it is no more the question of affordability but of availability at an efficient price, ie, after successfully plugging leakages and eliminating wastages. Besides administrative steps, what is of utmost importance is removing the price differentials between various thermal supplies, ie, between CNG and gasoline and also between natural gas and furnace oil. Furthermore, prioritising the availability between power, industry (textile), fertiliser, commercial and domestic users.
Advisor Hussain's shake-up announcement may result in giving sleepless nights to the present incumbents. It is though a clear and unambiguous admission that political appointees at the helm have often failed to deliver. Not just because they do not possess the required know-how, but also because the directors appointed on the boards of these oil and gas giants also cannot provide to the management either the guidelines or insulation against nepotism, cronyism and the political-cum-bureaucratic interference.
Dr Hussain appears to be well aware that the power to take independent decisions is critical if the new MDs seek to transform loss-making units into profit-making ones and successfully bridge the widening energy demand-supply gap. Thus, it is imperative that each newly appointed MD be allowed to downsize or rightsize staff and political considerations must not be allowed to influence such decisions. The PPP in government has been found to be invariably resorting to using state entities as recruitment centres for its loyalists - a fact that is a major contributory factor towards the heavy annual budgetary support for state-owned entities. In addition, the MDs must not be pressured into hiring/promoting people in violation of the laid down rules.
However, the woes of the oil and gas sector are not limited to flawed administrative decisions alone. The issue is one of supply, wherein the growing gap between supply and demand necessitates short-, medium- and long-term policies and initiatives. With respect to the short-term, Dr Hussain appears to be correctly focused on ensuring competent management to run these entities. 500 million cubic feet of Liquefied Natural Gas (LNG) will have to be imported to meet domestic needs within the next four to five months at spot prices. He revealed that LNG distribution companies would be launched by the SNGPL and SSGCL with the objective of ending the existing oligopoly (defined as a few companies who may collude to set the price). In fact, a more desirable long-term measure would be to allow both these entities to merge their activity and confine to transmission, thereby allowing new entrants to bid for distribution. Let the distributors compete to run the last mile, ie connect with the users.
Dr Hussain acknowledged that the inter-circular debt accounts for the failure of the country to achieve its generation capacity, partly accounted for by outright theft as well as failure of the government institutions to pay their bills. However, he added that it is the Finance Ministry's responsibility to resolve it. The elimination of the inter-circular debt would be the single most important policy action taken by this government during its tenure and would go a long way in not only easing International Monetary Fund concerns about the continued failure of the government to meet its conditions, but also in significantly reducing the existing energy gap in this country. However, it remains a pipedream three years down the line and one would hope that Dr Hussain seeks to ensure that at least the circular debt does not pile up again in the oil and gas sectors under his direct control. This requires both adjusting the tariff to recoup the cost as well as timely collection from the government-managed users.
In the long-term, as has been noted again and again by government functionaries, the focus would be on beginning work on the Iran-Pakistan gas pipeline as well as the Turkmenistan-Afghanistan-Pakistan-India gas pipeline. Dr Hussain added that a policy would also be formulated with respect to exploring tight gas as well as the hydrocarbon vision, as yet another tool to assist the country deal with the current energy crisis. The challenge requires the creation of a National Energy Board and merging the petroleum and natural resources ministry with the power ministry - under a unified command. This will ensure a focussed attention on exploitation of alternate fuels, such as: Thar coal, wind and solar power. Implementation of an integrated energy plan in accordance with the recommendations provided to the government by the Farooq Rahmat Ullah task force.
While we wish Dr Asim success in his profound endeavour, we also wish to caution him that the right talent with the requisite skill sets will not come forward through advertisements. They need to be identified by headhunters and then offered iron-clad contracts with sweeteners, ie, handsome financial rewards linked to desired results, along with firm guarantees and assurances against undue government/political interference.