Better late than never

Addressing a mammoth public meeting at Ghalanai, headquarter of tribal district of Mahamand in Khyber Pukhtunkhwa, Prime Minister Imran Khan has given a diagnoses of the chronic disease of power sector circular debt and compulsive increases in electricity and gas tariffs by attributing it policies of previous two governments. The assessment of the Prime Minister is absolutely correct if the’ idle capacity payment clause’ in power purchase agreements made by PPP government with IPPs for thermal power generation in 1994 and shady LNG import deal with Qatar by PML-N government in 2015 are taken into account, agreeing to buy it for $13 per mmBtu and injecting the most expensive RLNG in the gas distribution system by incorporating ‘take or pay clause’ in the agreement e for the sake of getting kickbacks.

The Prime Minister said that there will be no further increase in the prices of electricity and gas and assured possible reduction in their tariffs to boost productivity in the manufacturing sector and lessen the financial burden on domestic consumers. The shady power purchase agreement and LNG import deal have turned out landmines which were deliberately laid by the governments of other two mainstream political parties to push the economy into the vicious circle of stagnation. Abandoning of electricity generation from renewable, inexpensive and clean sources such as hydel, air and solar and opting for expensive thermal power generation from diesel and furnace oil amply reveals it. Similarly, stopping the exploitation of proven oil and gas reserves for increasing domestic production of oil and gas to make a rationale for imported LNG and that too at a price two times higher than the international price, says it all. The global demand for LNG has fallen and other countries are importing it at $4.5 mmBtu but Pakistan cannot import it that cheap because its hands are tied by the import agreement of last Nawaz Sharif government. However, renegotiation of power purchase agreements with local power producing firms should not have any hindrance, notwithstanding the clout of IPPs stakeholders in the corridors of power. Hopefully, their two strong representatives in the present government will not obstruct or delay any decision making for reduction in electricity tariff.