Energy sector promises

The much awaited Economic Survey of Pakistan was released yesterday, and along came government’s progress on the crucial energy sector. While claims like Pakistan transforming from an energy deficient to a regional exporter of power by the end of the decade seem too ambitious amid the current pace of reforms in the sector, certain improvements in the sector should be acknowledged.
Power sector is the most oppressed child of the energy sector with the circular debt building up once again. Where the previous governments did little to enhance the production capacities, the Nawaz government has initiated a multitude of projects to increase the power generation capacity along with tariff rationalisation under its National Power Policy 2013 and Vision 2025.
And call it the political will or the circumstances skewed in that direction, investment in coal and hydro power projects have received sizable attention. As mentioned in the Economic Survey of Pakistan 2013-14, China is ready to invest in some major power generation projects like power park infrastructure at Gadani, Thar Coal and Diamer Basha Dam.
However, the salient features of the National Power Policy 2013 highlighted in the survey should be a reminder for the government that still a lot needs to be achieved to combat the energy crisis. Challenges like generation of inexpensive and affordable electricity, pilferage and adulteration in fuel supply, aging transmission network, inefficiencies in the distribution system, and streamlining the role of the regulator continue to haunt the energy sector.
On the primary energy sources side, the survey reveals contrasting picture of the crude oil production. Over the past year or so, E&P companies’ have been shifting towards more profitable crude oil production so much so that oil flows have been the key drivers of growth in their profits. However, provisional figures for the period July to March show that crude oil extraction declined by over 17 percent in FY14 compared to FY13 (refer to the illustration).
And an important issue that seems to be receiving lesser limelight this time in the survey is also where little progress has been made over last year. Though it is part of the National Power Policy, the national publication sheds little light on efforts that the government has taken and plans to take for curtailing transmission and distribution losses, electricity thefts and improving recovery in the power sector.