Adopting a hard stance on power sector reforms, energy companies have demanded an end to slab benefits to consumers, accelerated deregulation and price rationalisation. Moreover, they have alleged that the government is more interested in scoring political points than working on a viable energy policy. A particular point of contention is excessive demand placed on the overstretched state gas sector due to political commitments.
During the three-day energy conference organised by the corporations, it was extrapolated that if current polices remain in force; the energy import bill would swell to $50 billion by 2026 with gas reserves dwindling to 1BBFCD. The private energy sector has proposed that gas prices be raised to a uniform rate applied to all. Deregulation was a key word with companies effectively demanding the unregulated sale of power through an open transmission system and the privatisation of state utility firms. They also urged greater incentives for exploration as well as improved security.
The power ministers response was far from satisfying, he hinted at improved energy conservation and steps on the ballooning circular debt but there were few concrete measures proposed. But as the KESC debacle reveals, it is doubtful that the private sector has a panacea for the festering energy crisis. The position on slab benefits seems to be particularly vindictive; it really benefits only a limited segment of the underprivileged. On the face of it there is little to differentiate the suggestions from IMF directives which entail the removal of subsidies and anomalies which impair the supposed efficiency of the free market. The complete removal of controls on the energy sector does not bode well; if the private sector is allowed to run amok as it did in post-Soviet Russia in the early 90s, it is a recipe for disaster. The need of the hour is to tap external sources, progress on the Iran pipeline or alternative supply from Central Asia would be particularly heartening.
