Priority area: K-Electric’s output continues to decline

Energy sector posted 12.18% growth, electricity generation posts slight increase

ISLAMABAD: The agriculture sector may have taken some shine off GDP, but the energy sector contributed its fair share as around 12.18% growth came from real value-addition in electricity generation, distribution and gas distribution.

This helped Pakistan achieve a GDP growth of 4.7% during 2015-16, revealed the Economic Survey 2015-16 on Thursday.

The contribution of electricity generation, distribution and gas distribution in the industrial sector remained 8.81%, with its share in GDP being 1.85%. This sub-sector registered a growth of 12.18% during the outgoing fiscal year compared to 11.98% growth last year.

Electricity

The output of electricity from the Water and Power Development Authority component recorded a growth of 8.53% compared to a decline of 17.71% last year while K-Electric Limited registered a negative growth of 11.53% compared to a negative growth of 13.51% last year.

According to the latest Economic Survey, during July-March 2015-16, the installed capacity in the Pakistan Electric Power Company Limited (Pepco) system remained 23,101MW compared to 23,212MW during the corresponding period last year with hydro contributing 7,027MW, thermal 15,324MW and nuclear 750MW.

During the period under review, electricity through thermal sources stood at 45,252 gigawatt-hours (Gwh) compared to 43,611Gwh last year, posting a growth of 4% while electricity generated through hydel remained 24,544Gwh against 23,478Gwh last year, posting a growth of 5%. Thus, in total, there was an increase of 2% in electricity generation.

Electricity produced via renewable sources during FY2015 was 802Gwh, while electricity import remained 335Gwh compared to 350Gwh in the corresponding period last year.

It is expected that electricity import would remain at the level of 443Gwh.

The Ministry of Water and Power showed significant improvement in recovery and losses issues. There was 93.40% recovery in bills; the highest in the past 10 years while the transmission and distribution losses declined 18%.

Gas

Natural gas contributes about 48% of the total primary energy supply mix in the country.

Pakistan has an extensive gas network stretching over 11,538 kilometres in transmission, 114,982km in distribution and 31,058 services gas pipelines to cater to the requirement of over 7.9 million consumers. About 4 billion cubic feet of natural gas is provided per day across the country.

Between July 2015 and February 2016, average natural gas consumption was about 3,387 million cubic feet per day (mmcfd) including 175 mmcfd of re-gasified liquid natural gas (RLNG).

The two gas utility companies (Sui Northern Gas Pipelines Limited and Sui Southern Gas Company) laid a 116km gas transmission network, 1,848km distribution and 679km services lines and connected 203 villages/ towns to the gas network.

During the same period, gas utility companies also invested Rs9.959 billion on transmission projects, Rs8.705 billion on distribution projects and Rs13.225 billion on other projects, bringing total investment to about Rs31.919 billion.

Moreover, an additional 254,870 gas connections including 254,648 domestic, 202 commercial and 20 industrial were provided across the country. It is expected that during the 2016-17, gas will be supplied to approximately 412,058 new consumers as utility companies have planned to invest Rs13.896 billion on new transmission projects, Rs32.739 billion on distribution projects and Rs24.408 billion on other projects, bringing the grand total to Rs71.043 billion.

Oil

The government, in order to enhance its oil and gas reserves, is trying to attract companies to undertake new exploration and production activities. In pursuit of its exploration-led growth strategy, during July- March 2015-16, OGDCL spud sixteen (16) wells including five (5) exploratory/appraisal wells.

Domestic production of crude oil remained 24.02 million barrels during July-March FY16.

Transport and power are the two major consumers of oil. During FY12, the share of oil consumption in transport and power was 49% and 40%, respectively. During July 2015, this share increased by 50% and 42%, respectively, while during July-March FY16, the share remained 55% and 35%, respectively.

Import of crude oil is a financial burden on the exchequer as petroleum products have a share of almost 17.2% in the import bill. During July-April 2016, 4.98 million tons was imported compared to 4.81 million tons in the corresponding period last year, a growth of 3.5%, while in terms of value $1.95 billion was imported compared to $3.59 billion during the period under discussion.

Published in The Express Tribune, June 3^rd, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.