Pakistan's alternative energy gains face climate changing test.

• Author: Fazl-E-Haider, Syed

Byline: Syed Fazl-E-Haider

Pakistan's consumption of expensive petroleum products currently stands at about 21 million tons, of which about 85 percent was met through imports. According to one estimate, around 50 percent of the energy need is met by the indigenous gas production and 29 percent by domestic and imported oil and 11 percent by hydro-electricity. The country has an installed refining capacity of 12.82 million tons a year from its five refineries.

What the country direly needed is to take steps on war footings to develop its alternative energy resources for meeting future energy security challenges. There are three reasons for development of renewable energy resources such as water, wind and sunlight. First, the country is paying higher costs for its dependency on conventional thermal based generation facility. Second, the unstable prices and supply of oil and gas across the globe demands a shift towards renewable energy resources.

Thirdly, the country's annual energy requirements are expected to more than double to 177 million tons of oil equivalent by the year 2020. With a refining capacity of 13 million tons, Pakistan meets only half of its annual requirements. The country's demand for petrol is likely to increase in the coming years. The demand for petrol will cross 8 million tons by 2019-20 from the current 4.73 million tons, according to one estimate. Lastly, the country has enormous renewable energy potential and its rational and efficient exploitation will help the country to achieve its future energy security plan.

Presently, the country faces power shortages due to rapid growth in demand for electricity. Power outages increased significantly due to the widening gap between supply and demand over the past six years. The country is largely dependent on oil imports. The country meets only 15 percent of the consumption from indigenous crude production, while 30 percent crude and 55 percent refined products are imported. If the government raises prices of petroleum products in a move to pass on the full impact of international oil prices to domestic consumers, it is bound to spark inflation and affect industry in the country.

The inflation goes up due to increase in petroleum products prices, electricity and gas prices. The government will not be able to afford subsidizing petroleum products for longer. It has no choice but to continue taxing petroleum, as it faces rising fiscal deficit, which will have to be made up for by...