Energy Profile of Pakistan

 The Government of Pakistan has unveiled a number of initiatives to facilitate the public’s access to energy, spur economic expansion, and find a solution to the energy issue. The initiatives include:

• The National Power Policy 2013

The policy aimed to develop a power production, transmission, and distribution system that was effective and could fulfill the requirements of the populace while boosting the economy of the nation in a cost-effective and sustainable way.

• Power Generation Policy 2015

The fundamental goal of the policy was to have enough cheapest available power production capacity while emphasizing the use of domestic resources, enabling all parties engaged in the trade, and protecting the environment.

• Alternative and Renewable Energy Policy 2019

The major objective of the 2019 policy was to encourage and support the nation’s development of renewable resources.

To satisfy the nation’s needs, Pakistan produces a very small fraction of its total oil output. The production of domestic oil is restricted by technical, budgetary, and technological limitations. According to the most recent figures, the cost of oil imports surged from July through April of FY2022 from US$8.69 billion to US$17.03 billion, a 95.9% rise.

Oil is becoming more costly due to rising global oil prices and the severe devaluation of the Pakistani rupee, which is putting pressure on the country’s external sector and worsening its trade imbalance. Similarly, between July and April of FY2022, imports of LNG (liquefied natural gas) increased by 82.90% in value, while imports of liquefied petroleum gas (LPG) increased by 39.86%.

Pakistan is also using nuclear technology to produce electricity, and its share is rapidly growing. During the period of July–March FY2022, the gross capacity of nuclear power plants rose by 39% to 3,530 MW, delivering 12,885 million units of energy to the national grid.

If we see the consumption of electricity by different sectors throughout Pakistan, it is divided into various areas like domestic, commercial, industry, etc.

 As of right now, the world is facing a shortage of energy and it has sent shock waves from Europe to Asia. And Pakistan is no exception. The energy industry in Pakistan is in crisis, due to a lack of energy output to keep up with the country’s rising demand during the past few decades. Pakistan is now reliant on imported energy resources like gas and oil.

The Asian Development Bank published a white paper in 2019 claiming that Pakistan is an energy-insecure country. Besides Pakistan, there are numerous countries worldwide including the developed ones that are also energy insecure. There are several examples of market growth followed by a downturn and severe contraction since the energy industry is, by nature, in a loop. But the current crises are different in several aspects.

The recent increase in energy costs has given us a glimpse into the future, where market disruptions might result if the transition to low-carbon energy sources is not adequately managed or stressed. According to Shazia Anwar Cheema, Pakistan might face an extremely challenging and disastrous winter as a result of the lack of long-term energy management strategies by policymakers.

The crisis is likely to worsen due to the Middle Eastern countries, which serve as the major source of imports, being severely impacted by the strain that Europe is experiencing as a result of the fuel and gas shortfall. The current bleak situation shows that the power shortfall at the moment is about 7,500 megawatts which subsequently results in 10-18 hours of load-shedding. This means the current supply is about 18,000 megawatts and the required supply is 25,000-25,500MW. Furthermore, Pakistan’s energy cost doubled in the last 9 months; it now stands at 15 billion USD.

U.S. oil and gas production continued to trend higher through April – a delayed response to very high prices in the middle of 2022 after Russia’s invasion of Ukraine.

But the fall in prices and drilling rates since late 2022 is set to reduce output in the second half of 2023 and tighten markets for both oil and gas later this year and into 2024.

Crude and condensates production from the Lower 48 states excluding federal waters in the Gulf of Mexico increased by 37,000 barrels per day (bpd) in May compared with April.

Production increased by 986,000 bpd (+10%) compared with the same month a year earlier, according to data from the U.S. Energy Information Administration (EIA).

Lower 48 production was running at the second-fastest rate on record and only 70,000 bpd below the previous peak of 10.52 million bpd in November and December 2019.

Experience shows U.S. production responds to a change in prices with an average lag of around 12 months, so near-record output in April 2023 reflects very high prices in the second quarter of 2022.