Reprioritising the energy sector

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THE PERFORMANCE of fertilizer sector in Pakistan may remain dull in coming months as official authorities consider that diversion of gas from fertilizer plants to power sector is the only solution for the new government to reduce power loadshedding on an urgent basis. The gas curtailment to fertilizer plants like Engro and Fauji Fertilizer Bin Qasim Limited (FFBL) may not get further aggravated as these plants are already getting gas far below the approved quota. According to the agreed formula, Engro was promised 200 million cubic feet per day (MMCFD) gas but only 103 MMCFD was available, while FFBL was promised 85 MMCFD but it is receiving only 54 MMCFD. However, if rotational or partial gas curtailment is opted for, it could be for a shorter period only as it would surely bring the whole fertilizer sector back to the square one. Fertilizers play a significant role in Pakistans agriculture strength and many other related sectors as well. According to statistics, at least 37 sectors are directly or indirectly dependent on the agro-economy. Last couple of years witnessed a very discouraging situation where the fertilizers production remained far below the production level thus leaving no option for the government, but to import a heavy consignment of fertilizers on higher prices. This practice, however, squarely failed to serve the purpose effectively courtesy the mismanagement of decision makers as import process was completed after the stipulated time was over. Even if the delivery was ensured in time, it had negatively impacted the agriculture growth targets as majority of the farmers either could not afford the heavy price of the imported fertilizers or relied on the ineffective availability of local fertilizers. At the same time, the commission mafia played havoc by minting heavy amounts in shape of steep profits. The fallback of such mechanism is too much high as it not only shrinks the farmers income level but also makes it hard to achieve the crops production targets. The country is already getting vulnerable to food insecurity due to multiple factors. There are other ways available by which the new government can manage the current as well as upcoming power shortfall, which include import of more furnace oil for the power sector at least for the short term. While the long-term option is to explore ways and means of alternate energy resources like wind power and solar energy which are not only cheap but also doable according to international studies. As the new government is flexing its muscles to settle down, it has to rationalize its priorities as any mismanagement about energy resources allocation would drag the country towards further crisis. However, it is yet to be seen how the new government takes this gigantic task.


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