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Financial Crisis in Pakistan

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Financial Crisis in Pakistan

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kistan is most likely to face a major energy crisis in natural gas, power and oil in the next three to four years that could choke the economic growth for many years to come, official estimates and energy experts suggest. Pakistan’s total energy requirement would increase by about 48 per cent to 80 million tons of oil equivalent (MTOE) in year 2010 from about 54 MTOE currently, but major initiatives of meeting this gap are far from turning into reality, said a former petroleum minister on condition of anonymity for the simple reason that he had also served the present government. Major shortfall is expected in the natural gas supplies, he said. According to official energy demand forecast, he added, the demand for natural gas, having about 50 per cent share in the country’s energy consumption, would increase by 44 per cent to 39 MTOE from 27 MTOE currently. This would leave a total deficit of about nine million tons of diesel and furnace oil imports, he said. Since the gas shortfalls were expected to be much higher, the country would need to enhance its dependence on imported oil, thus increasing pressure on foreign exchange situation, he added. Last year’s oil import bill amounted to about $6.5 billion compared with about $3.5 billion in 2004-05, mainly because of higher international oil prices - a burden expected to be even higher in future as a result of growing Middle East crisis. Current year’s oil import bill has again been projected by the government at about $6.5 billion on last year’s average prices, which have started to rise in the recent days. According to the former minister, the government had planned five major initiatives to meet these energy requirements. They included three gas import pipelines, Gwadar port as energy hub and LNG import. However, four of these measures, including the three import pipeline projects, show no signs of progress for various reasons while concentration on energy facilities in Gwadar would chiefly depend on...