Energy crises in Pakistan

Energy is a capital-intensive industry that takes a long time to develop and requires
significant investments. Therefore, a responsible energy policy is essential for a nation's
economy to grow sustainably and equitably. (Aftab, 2014) The current energy crisis is
thought to have started in 2007, but its root causes are political choices made in the early
1990s. (Amjad et al, 2022) Due to unrecorded economic activity, the relationship between
official GDP and energy consumption has not produced reliable results in developing
economies. (Awan et l, 2014) In the case of circular debt The increased reliance on price,
thermal oil power generation has also given rise to the phenomenon of circular debt in the
energy sector, wherein failures to make bill payments (especially on the part of public
institutions) set off a chain of delayed payments for imported furnace oil, natural gas, or other
inputs to the thermal generation system, which in turn impairs the operation of the power
plants and leads to less than optimal capacity usage.(Asif et al 2016) In the case of
implications for growth, major issues include, in particular, the supply chain obstructions that
prevent efficient generation, the technical and operational issues that plague the transmission
and distribution system, the fuel adulteration problems, the widespread electricity theft, and
the non-payment of bills.(Memon et al, 2017) Due to power shortages (which have
particularly affect small manufacturing businesses and services) and the budgetary effects of
energy subsidies, which take resources away from more productive sectors, Pakistan's energy
sector has grown to be a significant drain on the economy and is preventing growth. (Hassan
et al, 2022)

Impact of flood crises on Pakistan’s economy

The flood has had a devastating effect on a number of economic sectors, particularly agriculture and
its related industries. (Tariq et al, 2019) The shutdown of six power plants and one significant gas
field adds another 1,500 MW to the 4,500 MW electricity deficit, adding to the depressing mood.
(Abbasi et al, 2022) The severe economic shock is due to the fact that housing, roads, and agriculture
sustained the majority of the direct damage. According to Pepco's estimates, the company has
suffered losses of close to 5 billion rupees ($47 million) as a result of the flooding. Several grid
stations were partially swept away. (Tariq et al, 2019) Both direct and indirect damages could be
used to evaluate the recent flood's tragedy. The financial assessment of the completely or partially
destroyed assets, such as societal, physical, and economic infrastructure, could be referred to as
direct damage. This assessment is typically calculated at the book value or the depreciated value. In
contrast, indirect damages are income losses brought on by changes made while providing goods
and services. The direct harm to production capability and the economic and social infrastructure
also results in increased economic flows, increased expenses, reduced production, and decreased
revenue. (Devi, 2022) Despite having privilege to a variety of resources, Pakistan's economy is
plagued by problems like decreasing purchasing power, increasing local and Foreign debt and the
deterrent effect on the private sector activity. Pakistan's recent floods rank among the worst. recent
natural disaster that caused destruction and damage to crops, infrastructure, and millions of acres of
land and social and economic lives. (Bhutta et al, 2020)
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