Shoaib Aijaz / Amna Khan
Pakistan, heavily reliant on natural gas as a primary energy source, finds itself entangled in a severe gas shortage crisis that has had far-reaching consequences on its economy and the daily lives of its citizens. Accounting for nearly half of the country’s total primary energy supply, natural gas serves as the principal fuel for power generation, industrial activities, and household use. It contributes to over 60% of Pakistan’s electricity generation, with a combined capacity exceeding 12,000 megawatts.
Notably, natural gas holds immense significance as a domestic fuel in Pakistan, where it is utilized in more than 9 million households for cooking and heating. It has become an integral part of everyday life for millions of Pakistanis. Additionally, natural gas plays a crucial role in various industrial sectors, including fertilizer, cement, textile, and food processing. Compared to traditional fuels like wood and coal, natural gas is cleaner and more efficient, resulting in lower air pollution and greenhouse gas emissions.
The acute gas shortages experienced by Pakistan in recent years can be attributed to the rapid growth in population, urbanization, and industrialization. These factors have strained the country’s gas infrastructure, leading to frequent power outages, disruptions in the industrial sector, and financial losses for companies. Several key factors have contributed to the crisis, including declining domestic gas reserves, insufficient investments in gas infrastructure, and inadequate transmission and distribution systems.
Pakistan has explored various solutions to address the gas shortage situation, including pipeline imports and the establishment of LNG terminals. Efforts have also focused on enhancing the overall efficiency of the gas sector. However, a long-term and strategic approach is essential to tackle the underlying causes of the crisis and ensure a sustainable solution.
The gas shortage crisis in Pakistan is a complex issue influenced by multiple factors, including declining domestic gas reserves, insufficient investment in gas infrastructure, mismanagement, and inefficiencies within the gas sector, limited import capacity, reliance on gas-fired power plants, and population growth leading to increased energy demand. These factors have collectively resulted in a shortfall in domestic natural gas supplies, causing losses and disruptions in gas supply.
The consequences of Pakistan’s gas scarcity have had a profound impact on the economy and the people. The power outages and load shedding have disrupted industries, caused economic losses, and driven up energy prices. The reliance on imported fuels, such as LNG, has strained foreign exchange reserves and contributed to the growing trade deficit. Additionally, social welfare concerns have arisen, with the closure of educational institutions and hospitals, emphasizing the need for a long-term solution to address underlying issues in the gas sector and improve energy infrastructure to meet the escalating demand.
In comparison to other Asian countries, Pakistan’s gas shortage crisis is more severe than India’s but less severe than Bangladesh and China. Limited domestic gas production, coupled with inefficient infrastructure and mismanagement, has exacerbated the severity of the crisis. The urgency of addressing the gas shortage crisis in Pakistan highlights the need to rectify underlying issues within the gas sector and enhance infrastructure to meet the growing demand for natural gas.
To alleviate the gas shortage situation, Pakistan can adopt a combination of short-term and long-term solutions. These include diversifying energy sources, expanding domestic gas output, promoting energy efficiency, improving gas infrastructure, and addressing governance and regulatory challenges. Augmenting the domestic gas supply through pipeline imports or LNG terminals can play a crucial role. However, implementing these solutions necessitates significant investments and time. Therefore, a comprehensive and coordinated approach is essential to address the gas shortage crisis and ensure sustainable economic development in Pakistan.
As Pakistan endeavors to overcome its gas shortage crisis, a strategic focus on improving infrastructure, promoting energy diversification, and addressing systemic issues in the gas sector will be pivotal. By prioritizing these initiatives and implementing effective policies, Pakistan can pave the way for a more resilient and energy-abundant future, benefiting both the economy and the well-being of its people.
Authors:Shoaib Aijaz: Research Assistant and Mphil scholar Economics and Finance (PIDE),Amna khan: Mphil scholar in Economics and Finance (PIDE)