With ever increasing energy demands each year and a stagnant supply, the situation had to go from bad to worse.
The current government inherited many economic challenges from its predecessor, which also included electricity and gas load shedding. Although many commitments were made to resolve this crisis in a few months’ time in the election campaign, all the energy experts were regarding them as mere slogans because this crisis has been unresolved for so many years and has been one of the causes for the failure of many governments over the years. The reason is simple: the power sector has not been in the main priorities of any regime. With ever increasing energy demands each year and a stagnant supply, the situation had to go from bad to worse. Right now, the country has been facing the worst load shedding, which has increased the misery of the common man in the scorching heat, during the holy month of Ramadan.
Although the federal ministers are denying any unscheduled load shedding, the actual situation is the other way around and all the large cities are facing power outages of around 10-12 hours, while in rural areas this duration is even more than 16 hours. According to official sources, the electricity demand has surged to 21,000 megawatts (MW) while the supply is around 15,000 MW, which creates the shortfall of about 6,000 MW. However, the existing load shedding suggests that the shortfall is much more than these quoted figures. In a meeting with the Prime Minister, the Secretary of Water and Power suggested that a reduction in the demand is the only solution because the supply cannot be increased in the short-term. Very few people know that we have an installed generation capacity of around 19,000 MW but due to many operational issues this capacity is not fully utilised to the maximum.
The existing power distribution system has become obsolete and is causing huge distribution losses and there are many power failures when the system gets heated up and the transformers blown because of breakdowns, which is usually the case in extremely hot conditions. Although the government has reiterated its resolve to end this load shedding by the end of 2017 as it has envisaged many short-term and long-term policies, which include the construction of solar parks. The import of liquid natural gas is meant to overcome the shortfall of natural gas, which is an important component for electricity production. There are also proposed measures to increase electricity production from coal and long-term measures to build dams, which will take about five to seven years.
However, there is no official account regarding the ever increasing circular debt, which according to some sources has reached Rs 600 billion. The Finance Minister became furious when he was asked why there was no allocation in the recent budget to settle this amount. Some unofficial sources claim that the government is thinking of borrowing money from commercial banks at a very high interest rate to settle this huge amount, which does not seem like an appropriate solution to this issue that has actually undermined every government’s ability to resolve the menace of load shedding. This will not only add to the existing debt burden of the government, which is already reaching a new high, but will only prove to be a short-term measure as it will again raise the differential between the cost of production and the price charged to the consumers. It must be remembered that the current government retired a huge amount of circular debt when it came to power and claimed its success, but that proved to be every short lived as this amount is again haunting the country and is surprisingly going unnoticed by the finance and water and power ministries.
There has been some relief, as the cost of electricity production has gone down in recent months owing to the rapid decrease in world oil prices, which has resulted in reduced furnace oil prices — the main source of electricity production in the country. However, these prices are likely to bounce back after reaching their lowest, which will add to the adversity of this crisis. Though the present government has managed to achieve many economic successes, which have been duly recognised by many international and domestic agencies, the energy crisis and the load shedding of both electricity and gas are still unresolved. It is true that there are no simple solutions to these issues, which according to some experts are holding back our economic growth by 2 percent to create economic woes for the whole country and are the main hurdle in the way of sustained wellbeing for the common man.
If the government manages to overcome this problematic situation before the end of its tenure, as it claims, then it will be truly regarded as its greatest success to surpass all other achievements. However, at the moment, there is no good omen for the common man in the summers, except for praying for rainfall due to which the scorching temperature can subside to give some relief for the time being. As the government officials are saying that the reduction in demand is the only solution, the start of the monsoon season will also help them to escape the wrath of all and sundry. Perhaps nature will help this poor nation, which at the moment seems helpless as far as electricity supply is concerned.
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