ENERGY CRISES

AND
ITS IMPACT ON THE ECONOMY OF
PAKISTAN
GROUP MEMERBS
M. Ali Malik

Fahad Rasheed

Syed M. Taqi Jaffri

M. Hashim Rana

Arslan Bukhari
INTRODUCTION
 An energy crisis is any great bottleneck (or price
rise) in the supply of energy resources to an
economy. In popular literature though, it often
refers to one of the energy sources used at a certain
time and place
Continued….
 Energy runs machinery in factories, lights our
cities and powers our vehicles. There has been an
enormous increase in the demand for energy as a
result of industrial development and population
growth. Supply of energy is, therefore, far less than
the actual demand.
Continued….
 The energy sector is an important one for all the
various countries of the world, and especially, the
countries that are developing from an economic
point of view. It has been observed that the energy
sector has played a crucial role in the context of the
global economy. Prices of oil and such other
sources of energy have been affecting the
economies of various developing nations and have
been playing crucial roles in shaping them.
Continued……
 Energy resources have depleted! Whatever
resources are available are simply too expensive to
buy or already acquired by countries which had
planned and acted long time ago. Delayed efforts in
the exploration sector have not been able to find
sufficient amounts of energy resources.
Continued…
 Pakistan’s economy is performing at a very high
note with GDP growing at an exceptional rate,
touching 8.35% in 2004-05.In its history of 58
years, there has been only a few golden years
where the economy grew above 7%. This year
official expectations are that GDP growth rate will
be around 6.5 – 7.0%.
Continued…….
 For the coming years, the government is targeting
GDP growth rate above 6%. With economy
growing at such a pace, the energy requirements
are likely to increase with a similar rate. For 2004-
05, Pakistan’s energy consumption touched 55.5
MTOE (Million Tons of Oil Equivalent).
Now FAHAD will proceed further
Major energy crises feared
 Pakistan is most likely to face a major energy crisis
in natural gas, power and oil in the next three to
four years that could choke the economic growth
for many years to come, official estimates and
energy experts suggest.
Continued……
 Pakistan’s total energy requirement would increase
by about 48 per cent to 80 million tons of oil
equivalent (MTOE) in 2010 from about 54 MTOE
currently, but major initiatives of meeting this gap
are far from turning into reality, said a former
petroleum minister on condition of anonymity for
the simple reason that he had also served the
present government.
Continued….
 Last year’s oil import bill amounted to about $6.5
billion compared with about $3.5 billion in 2004-
05, mainly because of higher international oil
prices.

 Current year’s oil import bill has again been

projected by the government at about $6.5 billion
on last year’s average prices.
Continued……
 Petroleum ministry officials are not ready to speak
on record about gas import options and resultant
overall energy shortfalls because of recent political
developments on Iran-Pakistan-India pipeline
project and security situation in Afghanistan and
non-certification of gas reserves in Turkmenistan.
Continued…..
 Pakistan’s gas reserves are 32.8 TCF at present,
with reserve-production ratio in the order of 27
years, considering that domestic production does
not grow substantially. Power sector demand
represents 41 per cent of total gas consumption,
general industries 24 per cent, fertiliser 7.8 per cent
and domestic-commercial 22.8 per cent, cement 1.5
per cent and CNG 2.8 per cent.
Now TAQI will proceed further
Rising oil prices
 All predictions now failing and the oil prices are
rising and now about to reach 100 $ level. who
knows that in market trading if even the customers
are buying the oil on +100 $. The reason being
given for this enormous rise is the US oil reserves
are depleting and therefore customers are ready to
purchase the oil at any price available.
Continued….
 Rising tension between US and Iran is one reason.
Some sources are predicting the attack on Iran is
imminent.
 Emerging economies and developing will suffer
most.
 Those industries which consume more energy will
suffer with maximum. It will lead to rise of
inflation shutting down in efficient industries and
rising unemployment in third world countries.
Continued…
 Pakistan economy is already under intense pressure.

 Pakistan exports and its all economic activities are dependent

of uninterrupted energy supplies for its energy requirement.

 Already many textile mills closed down due to higher

production costs which make it uneconomical. Further
increase in oil prices will definitely bring more strain on
existing working units.
 
Now HASHIM will proceed further
Energy crises in Pakistan
 Production units were shut. There was severe load
shedding through- out the country. APTMA was forced
to accept volunteer load shedding each day on all units.
 The situation was worsened because Sui Gas Company
already stopped the supply of industrial units.

 And then naturally the blame game started, starting from

the water shortage in Dams to furnace oil transportation
problem, violence in Sind and maintenance activity in
some independent power producers.
Continued……….
 WAPDA is in favor of large dams and thinks that
the delay of construction of large dams was the
basic reason for the shortage of power.

 Energy is a key factor for the stability and

prosperity of Pakistan. If our production units keep
on shutting then unemployment will rise and hence
street violence will rise.
Continued…..
 Now Government has to make a huge investment
in energy sector.

 The objective should be utilization of diversified

energy resources.

 Conventional thermal and coal fired power plants

should be established.
Wind power
a solution of energy crises

 As Pakistan‘s energy needs are immediate, thermal

and large hydro-electric plants may not be the
solution because such projects may take between 4-
12 years to become operational.

 In order to meet energy requirement, the best

option is exploiting wind energy because wind
power projects can start generating electricity
within two years.
Continued,…
 Wind energy is the fastest-growing source of power in
the world and its globally-installed capacity has risen
from 20,000MW in 2001 to 70,000MW in 2006. USA
alone is installing 4,500MW per annum and China
plans to install 20,000MW by the year 2020.

 India offers a good example of a country that has

embraced wind energy and has added substantial
electricity generation capacity within a short period of
time.
Continued……
 If Pakistan can realize half the growth that India has
achieved, it can add 2,250MW to its electricity supply in the
next five years, much more than possible by pursuing thermal
power projects.

 In fact, wind energy can go a long way in meeting our acute

energy shortage.

 It is important that the government continues to provide

incentives to private investors in the form of an attractive
tariff.
Now ARSLAN will proceed further
Energy crises and Pakistan
 Current acute shortage of electricity in Pakistan
clearly implies failure on the part of government to
tackle it.

 WAPDA authorities often attribute this to the failure

to build dams.

 Hydroelectricity is the cheapest source of electricity.

More over building dams would benefit immensely.
Continued….
 Nuclear energy
There are only 2 nuclear plants providing 2 % of
electricity to our country.

Coal
Pakistan has world seven largest reserves of coal after the
discovery of Thar.

World bank report regarding the sources of energy in

various countries and Pakistan.
Energy crisis can be resolved if drastic.
Conclusion
 The current energy crises in Pakistan is the most
bad and horrible problem of Pakistan's history.
There is not only energy crisis problem, every thing
in Pakistan is in crisis either it is power supply,
education, politics, economy even each and every
thing. This time is the most difficult time of
the history of Pakistan.
Continued………
 Until now there is not any good step that was taken
by government to solve this problem. They must
appoint a Wapda chairman who will must be a
strong and person, who can take strong decision; he
must remove the corruption from this department
and should check each and every worker of this
department. When every one will do his work on
time then this crisis will be solve.