PEW proposes plan to improve energy mix, resolve prickly issues

Islamabad: The Pakistan Economy Watch on Sunday said inter-fuel substitution can culminate the need for gas load shedding during the five months of winter giving relief to masses and industry.

Load shedding is not a solution, cost-effective energy resources for power generation are needed for smooth and long-term economic development, it said. Our total energy requirement stands at 64.5 million tonnes per annum which eats up lot of foreign exchange due to imbalanced energy mix which leave little funds for public sector development projects, said Abdullah Tariq, SVP, PEW. Demand and security concerns are growing about oil which provides 35 per cent of global energy consumption therefore policy makers should consider replacing high cost products like petrol, diesel and LPG with cheaper fuels, he said.

Talking to women entrepreneurs at IWCCI, he said that gas load shedding has become a routine which has crippled the economy. Now plans are afoot to cut supply to CNG sector which will hurt millions. Rejecting the plan to upward revise CNG prices, Abdullah Tariq said that the issue of gas load shedding can be tackled properly by importing of two million tonnes of furnace oil for power generation during winter. Such a move will not only save $600 million in foreign exchange but also save 550 million cubic feet of gas per day.

High speed diesel is available in the international market for $946 per Metric Tonne, gasoline $955/MT and LPG 1070/MT while good quality furnace oil is offered at $650/MT FOB which is the cheapest option, he informed.

At the occasion Samina Fazil, founder President IWCCI said that many countries are generating 60-75 per cent of their electricity through coal; Pakistan should follow the suit in the long-term to ensure energy security, reduce power tariff and resolve circular debt. She said that China makes 79 per cent of fertilizer from coal but Pakistani industry has become addicted to natural gas available to them at $0.6 to 1.1 per mmbtu while the well head price is at $5.0 per mmbtu. Such a heavy subsidy on gas discourages exploration in a country which is full of hydrocarbon resources. Samina demanded of the government to immediately respond to the energy substitution proposal.