Pakistan Energy Outlook

1761 words 8 pages
Pakistan Energy Outlook (2010/11 to 2025/26)
Executive Summary
Pakistan’s energy sector is in a state of crisis and over the past few years has negatively impacted the social and economic development of the country.
Primary energy consumption in Pakistan has grown by almost 80% over the past 15 years, from 34 million tons oil equivalent (TOEs) in
1994/95 to 61 million TOEs in 2009/10 and has supported an average GDP growth rate in the country of about 4.5% per annum.
However since 2006/07 energy supply has been unable to meet the country’s demand leading to shortages. Meanwhile per capita energy consumption in Pakistan at under 0.5 TOEs/capita remains only one-third of world average.
Indigenous natural gas is the largest
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rade is not conducive for long-term LNG contracts, in which the LNG suppliers require payment securities• Pakistan does not possess LNG import infrastructure & current port conditions are inadequate for large-sized LNG vessels
Recommendations
• Merchant LNG import terminals be set-up by the privatesector, under capacity-utilization guarantees by the government for an initial period, to enable early spot/shortterm LNG imports
• The import terminals to be open access to create a competitive
LNG market
• Development of ports be undertaken by the government on a fast-track basis to provide accessibility for large-sized LNG vessels Blueprint # 5 – Rationalization of the Power Tariff
Issues
• The government-controlled power tariff does not reflect the true cost of power generation and the subsidies mechanism is leading to a crippling “circular debt”
• A single national power tariff does not recognize the disparities in power costs in different regions of the country and promotes inefficiencies
• Pricing slabs for different levels of power consumption are leading to market distortions and encouraging unethical practices Recommendations
• The single national power tariff be disbanded and decentralized to the multiple power distribution & marketing companies (DISCOs) to reflect the true power costs in different parts of the country
• The power tariff for each distribution company be deregulated, with no pricing slabs and no government subsidy

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