Economic Survey: Dependence on oil, gas continues

Published: June 2, 2014
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Government completed Guddu, Uch-2, Nandipur power projects in outgoing year.  PHOTO: FILE

Government completed Guddu, Uch-2, Nandipur power projects in outgoing year. PHOTO: FILE

KARACHI: The election campaign for May 11 polls revolved around power crisis and terrorism and Pakistan Muslim League – Nawaz (PML-N) was given a heavy mandate by the nation to take the country out of the turmoil.

In its first year in power, PML-N made aggressive energy policies which focused on increasing national generation capacity, minimizing losses and changing energy mix.

The party’s long-term goals include decreasing cost of generation and transmission losses and improving collection of bills.

During the ongoing year, the government accelerated the pace of work and completed Guddu and Uch-2 power plants. The Nandipur power project, which was put on hold by the previous government, was also inaugurated on May 31.

Subsidy 

The power sector is also heavily subsidised by the government. From FY03 to FY13, a total amount of Rs1.7 trillion has been given to the sector – an amount higher than the cost of Diamer Basha.

Note: The revised subsidy for 2013-14 is not known as yet

Energy mix

Dependence on oil and gas continues to be high. Soon after coming to power, PML-N settled a big part of circular debt against promises from IPPs to shift to less expensive coal. But nothing has been done in this regard so far; even the economic survey is silent on this major policy shift.

If gas consumption grows even at moderate rate, country’s reserves will largely be exhausted by 2025.

It is important to mention that some private companies like K Electric and Hubco have been working on coal projects but policy issues have not allowed Nepra to give them a tariff.

On the other hand, government seems to be aggressively pursuing power projects based on imported coal.

Note: Oil and coal are calculated in ton, gas in mmcft, electricity in Gwh

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