Editorial
The energy crisis gripping Pakistan is not a passing storm. Even if the war in Ukraine ends tomorrow, supply chains and prices will take months to stabilize, and the new normal may be permanently higher than what came before. Pakistan must stop treating this as a temporary inconvenience and start treating it as a structural emergency.
The first honest conversation is about petroleum prices. There is no credible path to reducing consumption without letting prices reflect the actual cost of fuel. Targeting high-octane with an aggressive levy makes for a good headline but changes very little, because high-octane is a marginal share of total fuel consumption. The real adjustment must come through petrol and diesel pricing, however painful that is for commuters and the transport sector.
On gas, the situation is grimmer. RLNG imports have effectively disappeared, and the government’s effort to raise domestic production will not bridge the gap. Industry must take priority. Households will face curtailment, and that is an uncomfortable truth that needs to be said plainly rather than managed through vague official statements. Fertilizer plants should remain protected, both because food security demands it and because stocks are currently at a manageable level.
The electricity problem is partly a generation problem and partly a geography problem. Surplus capacity sits in the south while demand peaks in the north, and transmission infrastructure has never caught up with the gap. As summer arrives and Punjab’s air-conditioning load climbs, load-shedding will return. Running furnace oil plants as backup will work, but it will cost the consumer.
The honest summary is this: austerity is unavoidable. Productive and essential consumption must be protected; discretionary consumption must be curtailed. And if Pakistan is serious about avoiding a balance-of-payments collapse on top of an energy shock, the exchange rate must adjust and non-essential imports, including automobiles, should face immediate restrictions.
