ISLAMABAD: Pakistan’s acute energy crisis is posing a serious predicament to its feeble economy and volatile national security environment, and to avoid these challenges, the country needs an immediate and focused approach.
This was the crux of a webinar organised by the Pakistan Institute of Development Economic (PIDE), here on Thursday, which was addressed by the former prime minister Shahid Khaqan Abbasi besides others.
Speaking on the occasion, Abbasi said that the country’s energy problems are deep and complex, being rooted more in shortages of governance and political will than of pure supply.
Pakistan is facing a deep energy crisis because of the lack of energy production from cheap sources, he asserted. He further said that new possible policies are required in this direction to improve the energy sector by paying more attention to alternative energy sources to foster economic progress.
Circular debt is a pure loss; somebody has to fix it. Entire circular debt is parked in industries and banks; these are unpaid bills to the IPPs. He further said that at present, power and petroleum ministers do not talk to each other, lack of strategy and communication are the main reasons behind the increasing level of circular debt.
He said that the government needs to speed up the oil exploration and production activities as a part of dealing with the ongoing energy crisis. He said that in 2013, when his party came into power in the first phase, they reviewed the energy needs of the country and tried to find immediate ways to address the issue. Considering the energy market supply/demand situation then, the government in a bid to improve the energy mix of the country decided to start importing Liquefied Natural Gas (LNG) for which both long-term and medium-terms steps were taken.
As a first, the government started talks with the Qatar government to sign a long-term agreement on supplying of LNG but at the same time to get reasonable rates the then government struck a deal with private LNG suppliers, which helped Pakistan in getting a better deal from the Qatar government.
He said that at present, LNG rates have skyrocketed but had the government took the right decision at the right time, which according to him was during the peak of the Covid-19, Pakistan could have saved billions of dollars by procuring LNG in time.
He said that long-term agreement with Qatar on supplying LNG, at present is much cheaper than Iran-Pakistan and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects.
But the irony is that the present government of Pakistan reinstate the problems despite, solutions, he said. There is no free energy in the world, energy is expensive and the most expensive energy is that you do not have.
Resolving Pakistan’s energy crisis will require political will, additional funding, and new power-generation sources. As a country lacks significant internal sources of revenue, opportunities exist for international donors to finance its energy recovery, VC PIDE Nadeem-ul-Haque said.
Copyright Business Recorder, 2021