There's no energy crisis; there's a crisis of ignorance

Power sector receivables have reportedly risen to 591 billion rupees, in excess of around 100 billion rupees from what the PML-N government inherited in 2013, with many analysts claiming that the amount is overstated to build a case for raising tariffs, subsidies and bank borrowing. There is ample evidence to indicate that the power sector's circular debt, identified well before 2008, remains the major impediment to the sector's improved performance, which in turn, accounts for a severe liquidity crisis leading to the periodic inability of Pakistan State Oil to open letters of credit. This requires injections by the Ministry of Finance into PSO enabling it to purchase the necessary fuel though this routine action, has not only compromised the government's capacity to reduce subsidies but also accounts for major inter-ministerial discord.
The fact that both the PPP-led coalition and the present government took the country on an International Monetary Fund (IMF) programme may partly explain the raise in tariffs, an extremely unpopular decision. However, what it does not explain is why the two parties when in government failed to undertake reforms that would have reduced the transmission and distribution losses to bring them at par with at least the regional average? One reason could well be the fact that political compulsions of the two parties with different provinces governed by different parties remain an obstacle to undertaking appropriate reform measures. The failure to raise receivables from the public sector organisations is partly sourced to agreements that the federal government is bound to honour including the rate charged to Azad Jammu and Kashmir and Federally Administered Tribal Areas (Fata) as well as the insistence of Punjab and Sindh governments that the receivables cited are overstated. In this context, it is unfortunate that the PML-N government, like its predecessor, has not bothered to rationalise the receivables and instead has opted to raise tariffs as a means to allay IMF concerns that someone, even if it be the hapless consumer, is paying for the sector's inefficiencies. And the only policy option for the government, to cut the amount due at source, has been rejected by the provinces time and again at the Council of Common Interests.
What is, however, further disturbing is the fact that during the tenure of the PML-N the receivables from the private sector are cited as rising dramatically - to 346.5 billion rupees - which is clearly an indication of the failure of the government's policy to cut connections of areas/localities where receivables are beyond a certain percentage. However, sources claim that this figure too is exaggerated and the real figure is 250 billion rupees.
The flawed policies of the PPP and the PML-N governments account for the current appalling state of the power sector. Both the governments conveniently overlooked the fact that macroeconomic implications of energy crisis are large, because energy is the source used to exploit all other resources. Last but not least, Buckminster Fuller, a legendary American engineer, system theorist and innovator of the 20th century, would challenge his critics: "There's no energy shortage; there's no energy crisis; there's a crisis of ignorance."