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Pakistan’s inevitable demand for energy | MG Opinion

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November 16, 2018 (MLN): Pakistan has plunged into darkness because of austere electricity shortage over the last few years. Pakistan's consumption of oil and gas has grown rapidly over the last 5 years, showing a sign of the nation's accelerating economic growth.

Energy sector in Pakistan comprises electricity, gas, petroleum and coal. In FY17-18, the economic growth witnessed a hike of 5.78% due to some major developments in the energy sector and wide range of structural reforms.

Oil consumption in Pakistan has shot up about 50% from 400,000 barrels per day in 2012 to nearly 600,000 barrels per day in 2017.

During the same period, Pakistan's gas consumption rose from 3.5 billion cubic feet per day to nearly 4 billion cubic feet per day, as Pakistan has been a big consumer of natural gas since the discovery Sui Gas fields in Baluchistan in 1952.

Pakistan’s Oil consumption in last five years (barrels/day)

Source: ceicdata.com

Pakistan’s Natural Gas consumption in last five years (billions of Cubic feet/day)

Source: ceicdata.com

Accordin to Shell 2017 LNG report, Pakistan joined the list of LNG importers last year and quickly became one of the world's fastest growing LNG markets.

The country has suffered a severe energy shortage as demand has risen sharply to more than 6 billion cubic feet per day, far surpassing the domestic production of about 4 billion cubic feet per day.

Recent LNG imports are beginning to make a dip in Pakistan's ongoing energy crisis and helping to boost economic growth.

There has been no significant change in electricity consumption patterns in the last one year, although households have increased their share of electricity consumption from 50% to 51%. This was offset by a 1% per cent decline in the share of industry in electricity consumption.

Sector-wise share in Electricity consumption (%)

Pakistan relies heavily on energy imports to boost its economic development. These energy imports put severe pressure on the country's balance of payments and forces it to repeatedly seek IMF bailouts.

During 2013 to 2018, 39 projects with cumulative capacity of 12,230 MW have been added.

According to the economic survey of Pakistan 2017-18, installed capacity of electricity reached 29,573 MW which was 22,812 MW in 2012-13 thus posting a growth of 30 percent.

Pakistan needs to develop export orientation for its economy and invest more in its export-oriented industries to earn the foreign currencies it needs for essential imports including oil and gas.

Energy demand could be met up to some extent in future as Pakistan is stepping up its domestic oil and gas exploration efforts.  American energy giant Exxon-Mobil has joined the offshore oil and gas exploration efforts started by Oil and Gas Development Corporation (OGDC), Pakistan Petroleum Limited (PPL) and Italian energy giant ENI.

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Posted on: 2018-11-16T17:57:00+05:00

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