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Energy crisis deepens, gas shortage despite huge reserves
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374
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Visits
374
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Visits
374
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January 06, 2012
Pakistan is moving further deep into energy crisis every day, pavingthe way for large scale countrywide social and economic unrest mainlydue to government’s criminal negligence and widespread corruption.
Despite the huge reserves, the acute shortage of natural gas has nowforced commoners to take to the street; public violent demonstrationsare now common scene across the country. The government has stoppedregular supply of gas to industrial and CNG sectors, triggeringsocio-political unrest. The central bank of Pakistan has rightlypointed out that the government did not address the biggest issue ofthe country, the energy issue. Otherwise the situation would have beendifferent.Government instead of addressing the genuine issues of the energysector opened the flood gate of corruption by allowing “misplaced”, inSBP term, Rental Power Plants in the country. Fate of these RPPs willbe decided by the Supreme Court but the government action has so farcost national exchequer billion of rupees without any significantpower generation.So far the country is heavily relying on the costly petroleum andnatural gas for the power generation but due to the non-availability of these resources the demand- supply gap is widening. During lastfiscal year the 2000-10 the PEPCO generated total 19,595 MW ofelectricity out of which gas based generation stood at 51 percent. Theshare of furnace oil FO in the thermal power generation was up at 47percent. During the period the oil companies supplied 80 percent oilto PEPCO while 16 percent supplies were dispatched to Karachi Electricsupply Company.The fuel oil supplies to the power generation companies are expected toincrease to 3.34 million tons by the end of fiscal year 14-15,according to the OCAC. The alternative resources, natural gas, isalso becoming extremely dearer commodity as the country isexperiencing worst gas shortages in the history.The government is now implementing load management plan to rationalizegas supply. The industrial sector and CNG sector are worst hit by themanagement plan. The government has already suspended supply to theindustries in many zones in Faisalabad and some other cities. Theimpact of gas suspension on textile sector is damaging as theexporters are unable to honor their commitments made with foreignbuyers, resultantly they are losing their share in internationalmarket as buyers are now turning towards other countries such asBangladesh.The authorities have now decided to close CNG stations in Punjabregion for 6 hours daily. Almost all the public transport has beenconverted on CNG and the closure of stations renders the publictransport off the roads on the scheduled days. Lack of transportationalso hampers industrial and other social activities. Though thecommodities is not available but the government was quick toincrease the CNG prices to Rs 74.30 per kg in Balochistan, KhyberPakhtunkhwa and the Potohar region and at Rs 69.62 per kg in Sindh andPunjab (excluding Potohar).The government is squarely blamed for the energy crisis which isevident from the fact that the country has sufficient gas reservesenough for next 20 years. Natural gas exploration has not beenaggressively undertaken in Pakistan therefore production hashistorically remained undiversified. According to the Central Bank’sannual report gas was produced from 98 fields but major portion 80percent was from only 9 fields mainly in Sindh, Pakistan desperatelyneeds alternatives for diversification of supply.The supply –demand positions of gas are deteriorating and the shortageis expected to be over 3 bmcfd by fiscal year 2016. The demand for thegas is increasing at the rate of 2 percent per year and would hit5.9bmcfd by FY 16. The demand and the supply position show that thecountry would face even worst form of gas shortage in the near future. However, the import of gas and utilization of Thar coal, experimentalgasification of coal has started may help ease the situation.Government has still time to act and address the vital issues ofenergy sector. The government needs to explore alternative resourcesfor power generation to meet future demand because only continuoussupply of electricity to local industries will ensure the economic andsocial stability in the country.
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