Reasons Behind the Energy Crisis in Pakistan

Ghazala Anbreen's work spans energy, journalism, and advocacy; making her a multifaced contributor to important discussions.

Pakistan’s current energy crisis is not only destroying the economy but also disrupting the state’s political system. The mechanism of power distribution in Pakistan is obsolete and inefficient hence power losses occur to adequately meet the consumer demand. The reasons behind this energy crisis need to be studied in depth if there is to be any hope of effectively tackling it in the future.

“Power outages are not because of less supply of energy in Pakistan, they are because of fluctuations on transmission lines which have not been updated from time to time, and hence the basic issue is of the difference of generation capacity and capacity to transmit it to the distribution companies”

In 2020, 20% of energy was lost during transmission in Pakistan. It is also said that Sui Gas reserves are depleted fast and will soon be exhausted in Pakistan. At the most, they may survive three more years or less and then we will be forced to import it. Many experts are of the view that the decision to use natural gas as CNG in cars in Pakistan proved to have more drawbacks than benefits if seen in the backdrop of long-term impacts on gas supply.

The circular debt of the country’s energy sector has reached a staggering Rs 5.422 trillion while capacity payments to IPPs have jumped to Rs 2 trillion (February 2024).

In many cities of Pakistan, there are frequent energy shortages.

“The power outages in Pakistan are because of the circular debt issue. When the government cannot pay in time to the power distribution companies (DISCOs), because of circular debt, these, in turn, cannot pay the power generators (GENCOs). These power generators (GENCOs). These power generators then struggle to pay their fuel suppliers who have no money to import oil. Thus these cash flow problems lead to delayed payments which affects the whole power sector even though we have sufficient generation capacity.”

Domestic energy production in Pakistan heavily relies on the import of fossil fuels. Setting up........

© Paradigm Shift