In a recent news conference, Pakistan’s Energy Minister highlighted the need for increased focus on oil and gas exploration in order to reduce the country’s dependence on imported fuel and lower its import bill. The discussion took place during the meeting of the Special Investment Facilitation Council (SIFC).
The minister noted that since 2013, the efforts in gas and oil exploration have decreased, leading to a persistent increase in the annual import bill to meet the country’s energy needs. This rise in circular debt has prompted the need for prioritizing domestic exploration.
According to Muhammad Ali, the Energy Minister, the SIFC deliberated on various strategies to control the cost of electricity generation and combat theft. The objective is to also minimize capacity charges paid to independent power producers during the winter season.
One of the proposed solutions includes providing industries with a tariff in incremental supply, ensuring that capacity charges are not a burden even if electricity consumption increases compared to previous years.
The meeting also discussed governance and management matters related to distribution companies (discos) and their potential privatization. The aim is to strengthen governing boards and management teams to combat power theft and improve revenue collection.
The SIFC also examined the feasibility of establishing a mechanism that allows power plants to directly supply electricity to industries, subject to paying wheeling charges.
Highlighting the gas sector, Minister Muhammad Ali stressed the need to address high losses. He emphasized the importance of improving the gas pricing structure to prevent government losses and ensure fair distribution of gas, especially during the winter season.
Additionally, the minister expressed the need to increase LNG terminals and import more liquefied natural gas (LNG) in the future. This will enable industries to operate at their full capacity and meet the growing domestic demand for gas.
Overall, the government of Pakistan aims to boost domestic oil and gas exploration to reduce the country’s reliance on imported fuel, strengthen the energy sector’s governance, and ensure a sustainable and efficient energy supply for industries and consumers.