The rampant energy theft

Pak-Arab Refinery Company (PARCO) reported this week an incident of oil theft that purportedly took place at a government pipeline at Karachi’s Bin Qasim area. Following the complaint, a case is reported to have been registered against individuals for allegedly stealing oil from the pipeline of PARCO.

The police officials stated that no arrests have been made in connection with the incident so far. The police officials recalled that the cases of oil theft at government lines were also registered last year; however, the ringleader of the group involved in stealing oil could not be arrested.

While the investigation into the oil theft from the PARCO pipeline were underway another incident of oil theft was reported in the vicinity of Steel Town. This is the routine pattern of addressing oil theft with the obvious result that there is no end to it and it appears that no one is serious enough to see an end to it.

Much like the electricity and gas thefts, oil theft in Pakistan is rampant, institutionalised and largely goes unresolved on account of institutional apathy and the crumbling state regulatory and governance structures. All the three thefts significantly contribute to building up of circular debt in the energy sector.

The issue of electricity, gas, and oil theft in Pakistan is a perpetual and unresolved problem that has both economic and social repercussions. The unauthorized tapping and pilferage of these critical resources not only affect government revenues and the sustainability of energy companies but also have wide-ranging implications for the general populace as they are the ones who have to make good these losses while sustaining tariff hikes, one after the other.

Electricity theft in Pakistan is a pervasive problem that has plagued the country for years. The theft occurs through various means, including illegal connections, tampering with meters, and non-payment of bills. According to estimates, the rate of electricity theft in Pakistan is alarmingly high, with losses amounting to billions of rupees annually.

This not only strains the finances of energy providers but also leads to widespread power outages, diminishing the quality of life for citizens and hampering industrial and economic growth. Much of the measures taken to arrest theft through technology have been outsmarted by the minds good at it.

Moreover, gas theft too is a major concern in Pakistan. Illegal connections and tampering with gas meters are common methods used to steal natural gas. This illicit activity poses a significant challenge to gas distribution companies, resulting in revenue losses and safety hazards. The diversion of gas through unauthorized means also leads to supply shortages, impacting both domestic and industrial consumers.

The pilferage of oil, particularly in the form of theft, smuggling and adulteration is a free for all and a serious issue in Pakistan, which has escaped the public censorship. The illegal trade of oil, including stolen or illegally obtained petroleum products, has detrimental effects on the economy, the environment, and public safety.

The unregulated distribution of adulterated oil poses risks to vehicles and machinery, while the smuggling of oil products across borders results in significant financial losses for the government.

The widespread theft of electricity, gas, and oil has a profound impact on the economy and society of Pakistan. It leads to reduced revenues for energy companies, hindering their ability to invest in infrastructure and service enhancements.

The once globally acknowledged, blue chip companies in the public sector like Sui Southern Gas Company (SSGC), Sui Northern Gas Pipelines Ltd, (SNGPL), Pakistan State Oil (PSO) and PARCO are all facing severe financial crises.

The prevalence of electricity, gas, and oil theft in Pakistan is a complex issue with far-reaching consequences. Efforts to address this problem must involve a combination of policy interventions, technological advancements, and societal engagement.

By combatting energy theft, Pakistan can work towards a more efficient and sustainable energy sector, ensuring reliable access to essential resources for its citizens while safeguarding the economy and environment from the detrimental effects of unauthorized resource diversion.

This wish list appears unrealistic to be implemented in the prevailing regulatory and governance structure, particularly in the energy sector. There is no single state body, which can mitigate this multifaceted menace.

The task to eradicate the multifaceted ills in the energy sector, involving multiple government agencies, could best be entrusted, to Special Investment Facilitation Council (SIFC), a facility to set up as a “single window” to facilitate investors, establish cooperation among all government departments, and fast-track project development.

It is chaired by the Prime Minister with members including federal ministers, provincial chiefs and the head of the army. The government established the SIFC to shorten lengthy business processes through a cooperative and collaborative ‘whole-of-the-government’ approach with the representation of all stakeholders.

It is aimed at capitalizing on Pakistan’s untapped potential in key sectors of defense production, agriculture, mining, information technology (IT) and energy through domestic and foreign investments.

Copyright Business Recorder, 2024