Pakistan's share high in region

KARACHI - Pakistans share in oil reliance among overall energy consumption mix in the region has sharply increased by 500 basis points to 31 per cent over the last five years and it is estimated to be augmented further by 38-40 per cent in coming few years. This consumption pattern indicates there is a rising demand of petroleum related products including, crude and furnace oil in the real sector of the economy. However, composition of energy consumption by industrial sector shows that out of oil, electricity and coal, the ratio of gas utilisation was higher in manufacturing activities during FY09. In the scenario, when the refineries are facing liquidity shortage arising from the circular debt issue, country must be seeking for alternative sources of energy production in order to fulfill countrys requirement. This trend is alarming for Pakistan given the fact that it meets 85pc of the oil need through imports. And thus, not only overall cost of manufacturing will increase but has negative implications for overall countrys balance of payments. If, gas and other energy supplies remain at current levels, the level of oil consumption could grow up to 40pc in next 4-5 years, said Farhan Mahmood, an analyst at Topeline Securities. According to analyst, with mounting oil prices during last 5 years, there is a shift in regional consumption mix from oil towards coal and hydel power energy. Unfortunately Pakistan is shifting its focus towards oil. Pakistan which used to meet 26 per cent of its energy requirement through oil is now meeting 31 per cent of its energy requirement through oil. The power generation sector is the main consumer of the furnace oil. Due to growing demand of furnace oil (FO) to produce electricity by thermal power plants, Pakistan has been spending huge amount on the import of petroleum products into the country. Pakistan generates 35 per cent of the electricity through FO. 5 years back it used to generate 16 per cent of the electricity through oil. Given the fact that oil is the most expensive way to produce electricity, world has shifted its focus from oil based power to coal and renewable energy resources, he said. Pakistan still meets 14 per cent of the energy requirement through FO which mainly comes from thermal power plant.

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