Energy conference predicts dark days ahead

Published: April 13, 2011
Experts propose hike in fuel prices, abandoning irrational tariffs.

Experts propose hike in fuel prices, abandoning irrational tariffs.


Abandoning government-controlled power tariff and raising the price of conventional fuels such as gas were among the proposals floated at the conclusion of the three-day Pakistan Energy Conference (PEC), convened to find short- and long-term solutions to the crippling energy crisis.

Stakeholders at the conference proposed that the government implement a ten-point “blueprint” dealing with core areas of the energy sector, and wrap up “scramble[d] policies”.

The PEC proposed to slap an enhanced “gas surcharge” to bring natural gas prices at par with those of alternative fuels, with an aim to conserve gas and attract new investments in the sector. Based on July rates, it proposed increasing gas prices by up to 800 per cent for the residential sector.

Conference participants also recommended abolishing the slab-based energy pricing mechanism.

“Government-controlled power tariff does not reflect the true cost of power generation … single, national power tariff [should] be disbanded and power tariff for each distribution company [should] be de-regulated,” recommended the PEC, to bring an end to chronic circular debt.

The Water and Power Minister Syed Naveed Qamar endorsed the PEC recommendations for tariff rationalisation and said that pumping in more money cannot work until the government resolved the core problem of irrational tariffs. The government does not have a magic wand to end load shedding, he added.

This year marks the first time that the government has resorted to the gas load shedding in summer, prompting CNG station owners to close down their stations in protest. Meanwhile, average power shortfall is around 3,300 MW, leading to electricity load-shedding for 10 to 14 hours in towns and villages across the country, even in moderate weather.

The federal government wanted to implement the two-holidays-per-week policy again, in order to conserve energy, but the final decision will be taken in consultation with the provinces, said Qamar while speaking to the media after the conference.

The government conserved 300 MW per day on account of energy conservation measures implemented last year, he added. Sources add that the two-holidays-per-week proposal by the federal government was opposed by the Punjab government.

The PEC also recommended fast-track import of liquefied natural gas (LNG) to meet the shortfall in short-term energy requirements. Pakistan’s current credit rating of below investment grade is not conducive for negotiating long-term LNG contracts, in which the LNG suppliers require payment securities.

Conference participants also proposed privatisation of all state-owned thermal power plants to enhance their efficiency, and recommended increasing tariffs for hydel- and nuclear-based power generation to raise funds for building new hydel and nuclear power plants.

Describing the Thar coal reserves as game changer for Pakistan, the conference suggested formulating a Thar coal development master plan, setting out a long-term roadmap for the use of coal.

Like the Friends of Democratic Pakistan forum, the conference proposed merging the ministries of water and power, and petroleum and natural resources, to form an energy ministry that would facilitate long-term energy investments.

Meanwhile, Petroleum Institute of Pakistan Chairman Zaiviji Ismail said that the energy sector problems are so serious that they need to be tackled from multiple fronts.

“Doing nothing and waiting for things to happen should certainly not be the option. If actions are not taken the crisis will worsen”, he said, adding that formulating a workable, integrated energy plan for the country was imperative.

Published in The Express Tribune, April 13th, 2011.

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Reader Comments (21)

  • Topak Khan
    Apr 13, 2011 - 9:24AM

    So rationalize tariff and do nothing to improve supply, what geniuses Recommend

  • KR
    Apr 13, 2011 - 9:28AM

    Welcome to Islamic Republic of Corruption, why in the world everyone acting like that they are in absolute shock to find out that we are headed for major trouble in Pakistan such as shortage of all types of fuel and even water. Main reason we have dark days ahead of us simply because no government (past and specially present) has ever kept up the development of infrastructure directional proportional to the population growth. And if we think it’s bad now just wait, show is just about to start, not only we will not have electricity, natural gas or kerosene but WE ARE RUNNING OUT OF FOOD ALSO. With rising food prices and increasing inflation poor man/woman can’t even afford to feed their families anymore and this will only increase crime and civil disobedience.

    Our corrupt politicians are not the solution but actually the problem, all these clowns need to work together to save our country instead of trying to work in smaller groups and just worrying about their jobs and scheming about some stupid coalition in order to stay in power. These are our problems so let’s be realistic and this time don’t try to blame this on India or America, this mess was created by our own corrupt Islamic brother and it is time for us to act like grownups and accept our responsibilities. Next time instead of voting for a political party we need to vote for the best candidate and ask him/her, how are they qualified for the job , what is their goal and how are they going to bring any change ??????????Recommend

  • Imran
    Apr 13, 2011 - 9:42AM

    Its a money game without realizing the conditions of poor in this country.
    If hiking prices is the only wayout than surely they are asking for anarchy in this country.How long will the poor be milked. Why not suggest “Stop Coruption,Improve Governance”.Recommend

  • TBM
    Apr 13, 2011 - 9:55AM

    this whole situation seems haunting:s. We seriously need to mobilize the concerned authorities.

    The more complex task is to win the general public endorsement about implementing these reforms…..”Extra-ordinary” efforts are needed for this. Media can be used as a tool to convince the general public over this.

    It may sound a little irrelevant, but recently we have seen media playing its crucial part in changing (by neutralizing the public anger and disappointment) the general opinion of the people, in most unpredictable manner, after Pakistan’s world cup semi-final loss. I saw this development as a positive one, and i believe it can set the example of the power of media to be able to do things which haven’t been done before.Recommend

  • Shahab
    Apr 13, 2011 - 10:33AM

    Great, at last we are listening to make rational but hard decisions for securing the future inter alia energy security for the country.Recommend

  • Billoo Bhaya
    Apr 13, 2011 - 10:36AM

    What do you mean predict Dark Days Ahead??? They are already here. They need to predict when people are going to come on to the streets to slash and burn the looters etc., I would not call something that has already occurred as a Prediction. Recommend

  • Najib Khan
    Apr 13, 2011 - 10:38AM

    This has become an every year story , the saga has been going on and on unabated for the last 20 years without any let up in the energy crisis , it is rather getting worse day by day , year on year.

    we have just been hearing the THAR COAL Project ‘s Lullabies & cradle-songs as a bed time music only with no practical steps taken in this direction so far.

    We all know how grave & crucial this subject of energy crisis has become , still no concrete action in sight .

    just TOPEE DRAMAS by the crook & corrupt Govt officials & minsters every year to hoodwink & fool the general public out, u see the newspapers & the magazines & trade journals they are full of the stories that China is interested in investing in Pakistan energy sector, USA is interested, France is interested , UK is interested, UAE is interested, the whole bloody world is interested but in reality what the people on top who matter are doing is just a mouth & lip servicing job & nothing else.

    they will complete their terms & tenure in the power , or will be pre maturely kicked out & would soon be replaced by another bunch of cheaters who would flaunt & ditch the general public for another 5 or 10 years, will fill their pockets up & then leave & then another bunch of thieves will come & this never ending saga will carry on endlessly until the volcano of the public anger will erupt like it has in Egypt , Libya & Tunisia, & hopefully that lava or erupted volcano will bring a miserable & deadly end to these corrupt plunderers of the national exchequer & we will get rid of them & new sun of prosperity will rise for the Pakistani nation.

    the soon it happens the better it is, Recommend

  • Soham
    Apr 13, 2011 - 10:55AM

    This is the time to take a step otherwise we will crushed like this forever.Recommend

  • IZ
    Apr 13, 2011 - 11:01AM

    800% increase for residential sector??? 800%??? a little too much to drink for the PEC participants ? or maybe its another typo at ET?Recommend

  • Nasir
    Apr 13, 2011 - 11:03AM

    it proposed increasing gas prices by up to 800 per cent“… what an idea sir geee.Recommend

  • s. amir
    Apr 13, 2011 - 11:05AM

    I do not think there is one magic key for solving the energy crisis. You will likely need a several and that too in a key chain. The essential thing is to understand that energy has to produce something of value. Simply running a bureaucracy or army on the proceeds of its sale is not very productive. Even burning it at home is not the wisest thing to do. Wasting water is the same as wasting energy. Conventional “sold-out and Funding dependent Thinkers and Planning” are positively not the place to turn.(unless you are in the planning for personal profit as a business).
    Sir Ganga Ram type of an engineer is needed at the top. Perhaps if he were alive today we would have “elevated irrigation canals” smaller river dams (height wise), canals as transport for agricultural produce, roads built at natural surface level, more “indigenous” solar energy solutions, and possibly safer locally produced nuclear plants. Well then, till the reincarnation of great soul of Ganga Ram ……Recommend

  • Pakistan Patriots
    Apr 13, 2011 - 11:05AM

    The energy is there, but the politicians are corrupt, and they don’t want to utilise the resources. and poor Awaam are fool, and sleeping. They don’t see what will happen in the years ahead….. Wake up idiots…………Recommend

  • faraz
    Apr 13, 2011 - 11:25AM

    Dont worry fellow citizens, we have the atom bomb! Recommend

  • No BS
    Apr 13, 2011 - 11:48AM

    Are these not the same suggestions floated in last years energy conference? These are also possibly the same suggestions that will be floated in next years energy conference. Absurd how in the last 20 years we have not been able to produce a single MW from the Thar coal mines.Recommend

  • Ravi
    Apr 13, 2011 - 11:51AM

    @Billoo Bhaya:
    Kya bhai hamare desh me bahut zya bijali aati hai kya?????
    Barring delhi and state capitals, peak hours me 6 to 8 ghante bijali jati hai…..Recommend

  • vivek ramana
    Apr 13, 2011 - 11:53AM

    pak better use your 100’s of nuclear weapons to generate power.. you dn’t need that much no’s to threaten ur enemy(india) and it will be of no use since we are having ballistic missile defence…..Recommend

  • Arsalan Mir
    Apr 13, 2011 - 12:20PM

    We have to make our Energy Mix better. Carrying on the heavy dependency on NG will make it worse. Give NG alternatives place in the mix. One solution, that is rigid but for a better future, is to reduce NG usage for other sectors and push its use for power sector. This will make power dependency on oil less and thus make power production more economical. Other sectors should be weaned off NG to perhaps LPG. Recommend

  • Rana Asghar
    Apr 13, 2011 - 12:49PM

    Final Victory will be Ours!Recommend

  • Ali
    Apr 13, 2011 - 2:57PM

    It’s OK everyone.
    We have democracy.
    We are making the necessary constitutional ammendments that will alleviate all energy issues for all time to come.
    The judiciary will start a long march to ensure we have energy.

    Welcome to the discourse of many of the “Opinion” writers and PPP media people that appear on this site.
    No wonder this country is in such a mess.Recommend

  • Ali
    Apr 13, 2011 - 3:56PM

    We don’t have the technological prowess to exploit nuclear enery to the same extent as France, US.
    Electricity provided by dams aren’t reliable. (What happens during periods of extended drought)
    Renewables aren’t practical yet – the price per MW is too expensive.
    Oil is too expensive.
    LNG requires huge investments of the order of billions of dollars per terminal. However once contructed, it is a very good power source.But there is no way we are organised enough to do anything of this magnitude.
    Natural gas – Iran has alot to sell but do we have the will and money to buy? Our “allies” will stamp that idea out. We are depleting our own reserves and not finding enough new sources.
    Yes things do look bleak.Recommend

  • Ali
    Apr 13, 2011 - 4:08PM

    Privatising Energy power stations can either prove to be a boon or a curse.
    The KESC was privatised, and despite good intentions on part of the new owner; they wanted to reduce what they considered to be excess staff, the PPP & MQM clubbed together and trashed the companies HQ. Would you invest in Pakistani power if your customers were like this?
    The other risk is that our “elites” will buy up the stations, and create havoc in the market – a bit like the sugar barons, by creating artifical shortages and hiking prices. Recommend

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