LAHORE: The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has stressed the need for overhauling the power sector, through some drastic measures as the total cost of inefficiencies in the power sector is estimated at a whopping Rs 9.4 trillion during the last 15 years.
BMP Chairman Mian Anjum Nisar stated that in present scenario the energy efficiency and conservation are key measures used by countries across the globe to mitigate associated risks. However, in the case of Pakistan, both energy efficiency and conservation were generally treated as alien concepts.
Referring to a report, he said that the stock of circular debt has surpassed Rs 2.3 trillion levels, while the government budgetary support has reached Rs 4.9 trillion, besides borrowing cost of budgetary support is computed at Rs 2.4 trillion during this period.
He said that Pakistan, being a net importer of energy resources, was facing serious supply-side challenges, as the global price of crude oil and imported coal had witnessed an increase of 32 percent and 103 percent respectively only in the last nine months, leading to a significant threat to country’s energy security.
Mian Anjum Nisar said that the sector needs to be deregulated in letter and spirit, as nothing can work unless the DISCOs are truly empowered and allowed to act independently.
He pointed out that the power sector has been suffering from miss-governance, lack of DISCOs’ competence and missing coordination between the generation and distribution systems.
The sector alone can drag the economy down to an abyss unless it is resolved. And for that to happen, nothing short of deregulation and privatization will work, as successive governments have used the energy sector for their political gains by taking decisions that have resulted in unabated rise of circular debt.
Quoting the figure, he said that energy consumption for FY 2020-21 stood at 60.2 million tons of oil equivalent, registering an increase of more than 15 percent over the previous year. This situation was becoming unsustainable for the country and warranted a concerted effort, at the national level, for implementation of energy efficiency and conservation measures, across the energy value chain. So, the government will have to review the situation holistically with a mandate to consider and recommend measures to be taken for conservation of energy.
He noted that there was an urgent need for up-gradation of energy efficiency and conservation standards and strict enforcement, besides replacement of inefficient appliances and consumer awareness for responsible use of energy were other key areas which should be identified for action as a national priority. He estimated that a dollar outflow of around $ 1.150 billion could be potentially saved annually through implementation of efficiency and conservation measures.
Copyright Business Recorder, 2022