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AN OVERVIEW

Crisis’ has been coined by a Greek word which means ‘decisive moment’. Crisis is declared
when something has gone to a level where an action must be taken to avoid complete disaster
or breakdown. Energy is essential for the maintenance and development of the quality of
human life as well as for economic activities. To maintain accelerated growth momentum, the
economy needs reliable, uninterrupted and affordable supply of energy. Pakistan is in the grip
of a serious energy crisis that is affecting all sectors of the economy and the various segments
of the society. As the situation stands to-day, there are hardly any immediate solutions to
resolve the issue. A change of attitude and a change of life style is needed at the national level
which should be triggered by the ruling elite and followed by all segments of the society that
have access to electricity. At best there could be some short and long-term solutions to the
crisis but they need immediate planning and execution with an enormous investment.

METHODS

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My work was based on both the qualitative and quantitative research. In qualitative research
my research objectives was to know the impact of this present crisis that how it affected to
the life of people as well as its effects on economy.
In Quantitative research I worked to find, the figures and facts that affected the economy in
term of percentage, ratio and in numerical term (digits) etc.
For my investigation I had to adopt both primary and secondary research.

PRIMARY RESEARCH.
Most of my research was based on observation and interviews. I observed the condition of
general public is due to present condition, as many protest took places against that loads
heeding. People blocked many roads, fire the territories and torn their electricity bills, on the
other hand industries were threaten government to shut down their industries.
To find out exact figure and facts (as current data has not been published yet) I survey many
industries, especially textile industries in Karachi, and had interview to find out what is the
exact position what sorts of problem they are facing and what strategies are undertaken to
survive in this condition.
I also did market survey and analysis how shopkeepers, small scale badly affected with this
crisis.

SECONDARY RESEARCH:
My most of work depended on secondary research as I was not able to complete my
investigated based on primary research as I was restricted to only one city while the crisis hit
almost the country.
My main source was internet as I found much valuable research from Pakistan economy
survey and other relevant data from other sources.
The new paper was one of the major sources of my secondary research as I collected many
news related to the energy crisis from news papers.

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PRESENTATIONS
Before I jumped to my research objective I must need to describe the sources of energy in
Pakistan. Which I divvied into five categories, the relevant information is changed in to
graphical format for viewer convenience. The presentation section also includes the pattern of
energy usage by sectors to understand how energy is consumed by sector. The most of the
material is secondary research based.

SOURCES OF ENERGY :

Pakistan’s commercially exploitable energy resources consist of COAL, GAS, OIL and
HYDROPOWER, and a large base of traditional fuels in the form of fuel wood, agricultural
and animal wastes. Pakistan does not have adequate energy reserves . Pakistan has to import
large quantities of oil to meet its energy requirements.

There has been consistent change in the Pakistan since 1997-97. To 2006-07The major energy
change has taken place in the share of oil and gas consumption. Let’s have a look of each
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source, their demand, production and consumption.

CRUDE OIL

During the first nine months of the outgoing fiscal year 2007-08, the consumption of Crude
oil products increased by 10.1 percent. The balance recoverable reserves of crude oil in
the country as on January 1st 2008 have been estimated at 339 million barrels. The average crude
oil production during July- March 2007-08 was 70,166 barrels per day as against 66,485 barrels per
day during the corresponding period of last year, showing an increase of 5.54 percentLet’s have a
look on consumption and production of crude oil in Pakistan.

The production of crude oil is not sufficient as consumption. There is no prospect of Pakistan
reaching self-sufficiency in oil.

NATURAL GAS

Natural gas has been gaining immense substance around the world due to its quality of being
a cleaner fuel compared to coal and oil. Pakistan depends heavily on its natural gas reserves
for different sectors of the economy. The Energy Commission estimated that Pakistan will be
facing a shortfall in gas supplies rising from 1.4 Billion Cubic Feet (BCF) per day in 2012 to
2.7 BCF in 2015 and escalating to 10.3 BCF per day by the year 2025.

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HYDRO ELECTRIC POWER:
Hydroelectric power generation is the cheapest way to produce power,. Hydropower is
providing about 30% of electricity in Pakistan. Although, Pakistan has relatively high
endowment of hydropower potential, only 4,964 MW (17%) has been exploited and about
1,450 MW capacity is under construction.

Nuclear power:
In Pakistan, nuclear power makes a small contribution to total energy production and
requirements, supplying only 2.34% of the country's electricity. Total generating capacity is
20 GWe and in 2006, 98 billion kWh gross was produced, 37% of it from gas, 29% from oil.

Coal:
Coal currently plays a minor role in Pakistan. s energy mix. However, Pakistan
contains an estimated 3,362 million short tons (Mmst), sixth-largest in the world.
Recently, the discovery of low-ash, low-sulfur lignite coal reserves in the
Tharparkar (Thar) Desert in Sindh province, estimated at 1,929 Mmst, has
increased both domestic and foreign development interest.

PATTERN OF ENERGY CONSUMPTION BY

USER

CAUSES OF ENERGY CRISIS

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The world is facing a daunting task to meet the growing energy demand that is likely to
double in the next twenty years. Pakistan is among those developing countries where the need
to tackle the challenge is greatest.

Gap in DEMAND and SUPPLY:

EXPECTED SHORT FALL:

AGING OF THE EQUIPMENT

One very important reason attributed to this energy shortage is the aging of the generating
equipment which could not develop the electricity as per the design requirement. This is the
responsibility of continuous updating the equipment and keeping the high standard of
maintenance.
POLITICAL UNCERTANITY:

Political instability has also played a role. Pakistan has seen quick changes in ruling
governments over the past few decades. Each regime has proposed quick fixes to the problem
but no comprehensive energy policy that provides a long term vision for energy production in
Pakistan.

WASTAGE OF ENERGY
Industry uses around 30.0 per cent of total power generated and around 45 per cent of total
electricity generated is used for domestic consumption. Use of energy in old machines and
lack of awareness of efficiently using it in industry and for domestic consumption causes
substantial loss that might be difficult to quantify but can be definitely reduced. Similarly
transport sector uses around 28.0 per cent of energy. It wastes energy due to old transport and
improperly tuned engines. Heavy losses due to transmission, distribution and theft are
estimated around 30.0 per cent. Large scale theft of electricity as clearly revealed by the
growing difference between units generated or purchased and those paid for.

INCREASE IN SUPPLY OF ELECTRICITY:

The basic cause is the utter failure to increase the supply of electricity to keep pace with the
growing demand. While the installed generation capacity had increased by 53 per cent
between 1994 and 1999 (from 11,320 MW to 17,400 MW), it increased by only 12 per cent
between 1999 and 2007, to 19,420 MW.
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UNDER-UTILIZATION OF EXISTING GENERATING CAPACITY.:

The availability of Hydel electricity naturally goes down in winter months by 60 per cent
from 6,400 MW to about 2,500 MW, but unfortunately, the actual generation of electricity
from thermal plants has also declined by 4,000 MW against the installed capacity of 13,000
MW, thus raising the demand supply gap to 5000 MW:

HIGH COST OF FUEL

The cost of crude has increased from 40 $ to 140 $/barrel s last couple of month it means the
generation from thermal units are costing exorbitant price. WAPDA and KESC when
purchasing electricity on higher cost are not eager to keep on selling the electricity on loss.
Therefore they do not move on general complain of load shedding.

MONOPOLY IN THE BUSINESS

Wapda and KESC are two generation and dispatch units in Pakistan. although NEPRA is a
government authority to settle the tariff issues but the fact remains that once the question of
WAPDA comes the authority has a very little influence.

EXPLORING COAL
Pakistan is blessed with large amount of the coal. again no serious work is done to explore
the coal for power generation. This is complained that the coal quality is inferior. however
tailored made solutions are available to burn any type of coal. Government is looking for
private sector to play its role.
RENEWABLE ENERGY
Pakistan has great sourced of sun and wing energy but achieving only 2% from solar and 0%
from wind energy. Pakistan coastal areas can be great source of wind energy while most of
the part of the country ha s15-16 hours solar light.
ENERGY PLANNING
In spite higher costs immediate relief is only possible with thermal power plants which can be
commissioned in 24 months time. A comprehensive and realistic planning will help to
develop generating units in Pakistan which will be a catalytic element for the economic
growth, poverty elevation and prosperity in Pakistan
DISTRIBUTION SYSTEM
Wapda briefing highlight the poor distribution system as the main cause of tripping and
break down of the system. However we consider as the last of our concern.
This is true that the distribution system causes many unwanted tripping and breaks down but
now we honestly believe that the shortage of energy generation is our main cause of the
problem for last twenty years WAPDA and KESC complaining about the distribution system
but fails to bring any improvement.
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HYPOTHESIS

My hypothesis is based on the effects of energy crisis on different areas of economy of

Pakistan.

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EFFFECTS:

No country can achieve high economic growth without producing sufficient energy.
Production of energy reflects industrial output, agricultural output, transportation, etc.
Electricity load shedding in Pakistan is alarming. When energy supply of an industry is
restricted, its output decreases and cost of production increases due to which many industries
shut down leaving labor unemployed. The upsurge of inflation is due to energy shortage in
Pakistan. Number of people living below poverty line is increasing due to unemployment and
inflation, both of which are by-products of energy crisis.

EFFECT ON DAILY LIFE:

Load shedding has profound effects on a man's psychological condition and mental capacity.
It stimulates negative emotions of frustration, repugnance, anger, aggression, acrimony and
leads to an absolute absence of patience.
As in almost every other field Pakistan is suffering also with a very serious crisis in the
power/electricity generation sector. In fact according to a recent estimate around 67% of our
population continues living in darkness even in this modernized era. The electricity and
power shortage is a chronic problem that has slowed Pakistan’s social and economic growth
rate.
Students are suffering badly as their final exams are on head and they don’t have electricity to
study. Weeding ceremonies, different events are badly affected due to power failure.

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EFFECTS ON GROSS DOMESTIC PRODUCT(GDP) AND
GNP:

Energy crisis is one of the major causes in decline in GDP and GNP. As Pakistan was
expected GDP around 10% but had great decline due to increase in oil price, interest rate and
the major cause ENERGY SHORTAGE,

EFFECTS ON
SMALL AND LARGE SCALE BUSINESS:
The continuing power crisis has not only disrupted the daily lives and businesses of people
but has also added to their miseries. It has impeded the growth of both small scale and large
scale businesses. Industrial progress is in shambles owing to the unpredictable and the
unreliable power supply. The shopping malls and the open markets that were once swamped
by the customers are now dark and deserted.
Power cut caused disruption to industrial production. Load shedding has caused irreversible
losses to the small traders and unemployment rates have almost doubled this year. Local
traders face colossal losses, which have put the lights out on almost 25 percent of cottage
and small industries in the city.

Over 250,000 workers linked to cottage industries and small businesses are badly affected.
Printing presses, garments manufacturers and power looms operators are the main
victims of load shedding, adding that power looms have gone down from 30,000 to merely
9,000 while printing presses are down to 7,000. Over 2,500 small garments traders have
been partially closed while the remaining have lost local and international orders since they
were not able to fill these orders on time, thanks mainly to load shedding.
• . According to The News, almost 25 percent of small traders in Karachi have shut down
their businesses. This has also increased unemployment. The losses small traders face
for every hour of load shedding amount to Rs.1.13 billion. The small and medium sized
industries that do not have their own power generating plants were forced to reduce their
working staff.

• Over 100% increase in raw iron prices in the last 3 months, coupled with unprecedented
power load shedding, has crippled Pakistan’s local industry and brought production
down to barely 30%.

• HYDERABAD: Pakistan Wapda Hydro Electric Central Labor Union (CBA) President:
Closure of 3,000 industrial units because of acute power and gas shortage has rendered
jobless tens of thousands of workers.

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• There are lots of small printing shops where people work on small machines. According
to them the machine takes at least 10-20 minutes to warm up before starting printing and
the electricity breakdown happens 12-14 hours a day.

• A 2-hour load-shedding in industrial area means a loss of millions of rupees to the

national exchequer and denial of man-hour utilization in industries.

• According to The Pakistan Association of Automotive Parts &

AccessoriesManufacturers (PAAPAM) has expressed deep concern over unscheduled
load-shedding of electricity which is causing heavy losses to the auto industry. Load-
sheddingof electricity is making it almost impossible for auto parts’ manufacturing units
to meet local and export orders. Non-availability of electricity was forcing the
industrialists to close their units.

• The All-Pakistan Organization of Small Traders and Cottage Industries has claimed that
over 4,000 business units have closed down and more could face the same fate with the
hike in power supply and tariff.

• Pakistan Hosiery Manufacturers Association (North Zone) announced that the

continuous increase the load shedding and gas shortage have forced 25 per cent
Hosiery Units to close their businesses. The frequent interruptions in gas and
electricity supply cause delay in meeting export orders. Therefore, to overcome the
delay, the exporters have to send their consignments by air instead of sea at higher cost.

• According to THE NEWS: The daily 18 to 20 hours long load shedding of electricity
was badly affecting the working of more than 6000 small and big sized industrial
units in export-oriented Sialkot, and this critical situation was rendering the hundreds of
the daily waged laborers and industrial workers jobless and due to this critical situation
foreign buyers were canceling their orders as the Sialkot exporters were unable to ensure
the timely dispatch of their export consignments to their foreign destinations.

• Agriculture machinery manufacturer, auto parts manufacturer and surgical instruments

manufacturers had press conferences in which they said that small manufacturers were
the worst hit in the present circumstances and asserted that several were facing
starvation.
All stakeholders associated with this sector have been badly affected, with high input
costs and work in factories grinding to a halt for hours with every power shutdown.

• Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA)

described that the export of the country has been decreased to 50 percent due to load
shedding and insufficient supply of sui gas to the industrial sector. the million meters
cloth has also been struck up with dyeing mills due to insufficient gas supply to the
mills, under this situation no foreign buyer will like to give new export orders to
Pakistani exporters and ultimately the national exports would face a serious blow.

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• EFFECTS ON SHOPS AND SHOPKEEPERS:
Food business, like others, runs on electricity. Urban dwellers all over the country are hooked
on to the diverse food items and restaurants. The ever growing businesses have multiplied the
number of bakeries, cafes and restaurants everywhere. The well-to-do food chains and
restaurants in the posh areas are coping with the crisis in their own way, through their
resources and revenue. The not-so-well-off businessmen suffer most. Consistent power cuts
in all the areas have severely affected the food business in the city.
• Ice- cream parlor and general stores where ice- cream are kept suffering a lot as ice-
cream needs to be preserved at a particular temperature, it requires larger machinery
meaning more electricity.

• According to meat shopkeeper: "Our business is affected badly by electricity load-

shedding. There is no electricity here for most part of the day. We only have one big
freezer here but we don't normally need it because we don't use frozen meat. The freezer
is used for red meat. With no electricity in this area people think that the meat is not
good so they prefer to buy it little expensive but from shops where they have generators.
• According to tailor (sticher): Tailors "There is no electricity for almost two hours each
day, this has resulted in a delay in meeting the deadlines of customers. Needless to say
my customers are very upset and angry with me. But I can’t do anything as there is no
power almost 10 hours daily which badly affected my business.
• CNG stations: The power shut down also affected the fool supply at various filling
station, the CNG station also restricted the per vehicle gas supply to just two mft,
leaving the consumer in difficult situation.

EFFECTS ON TEXTILE BUSINESS:

• Textile exports of the country decreased by 3.79 per cent during the first seven
months of the current financial year as compared to the corresponding period of the
last financial year.

During January-July 2008-09 textile products export was recorded at $5.82 billion as
compared to export of $ 6.05 billion registered during July-January 2007-08,
the highest decrease of 56.51 per cent was registered in export of yarn other than cotton
yarn. Textile exports during January 2009 decreased by 8.98 per cent as compared to
December 2008.
• In Punjab textile industry’s share was over 60 per cent, adding according to APTMA’s
study energy supply disruption only was causing an estimated loss of Rs1 billion per
day.
• According to chief KATI; 150 spinning and 10,000 weaving units had already closed
down across the country. in the last three months over 300,000 industrial workers had
lost their job in Faisalabad alone.

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• PTEA Chairman said that: textile industry, earning 65 percent of total foreign exchange
and providing 40 percent employment in the country, is presently on the verge of
disaster textile exports have slid by 6 percent in 2008 compared to preceding yea. bed
sheets exports declined by 9 percent and garments exports slumped by 20 percent due
to 18 to 20 hours load shedding of gas and electricity as major factors.

EFFECTS ON EXPORT ORDERS:

There was 40 percent shortfall in the exports because USA and European countries were the
major buyers of Pakistani products.
According to THE NEWS: LAHORE: Basic textile mills, flooded with export orders due to
the global textile industry realignment, have been unable to cash in on the opportunity as gas
load-shedding.
All Pakistan Textile Mills Association claimed that 60 to 70 per cent of the industry had been
affected and was unable to accept export orders coming in from around the globe.
• According to All Pakistan Textiles Mills Association (APTMA) :hundreds of industrial
units have been closed due to energy shortage. textile industry has more than 60 share
in country’s exports, 27 in industrial value addition and 38 in employment sector
but energy deficit pushed this large sector to the wall. exporters are unable to meet their
export orders, textile export orders worth $5 billion were lost at Heimtextil Fair
Germany this year while sixty thousand jobs are in danger as a result of the
downfall in industrial production in Faisalabad region due to severe load shedding
of electricity and gas.

MARBLE EXPORTS DECLINE BY 50 PERCENT

According to Sanaullah Khan, former chairman, All Pakistan Marble Mining Processing
Industry and Exporters Association (PMMPIEA) (KESC) is carrying out 10 to 12 hours load
shedding daily, causing immense financial losses to the sector. He said that domestic
consumption, which was earlier generating around Rs1 billion per annum, has depicted 50
percent decline where marble processors have failed to meet the market demand, owing to
recurrent prolonged load shedding, and almost 50 percent decline in exports has been
witnessed.

MANUFACTURING SECTOR
Large‐scale manufacturing registered a negative growth of 5.6% in July‐November 2008
as against reasonable growth of 6.9% in the comparable period of last year (2007). This
implies that large‐scale manufacturing sector is exhibiting signs of moderation on the one
hand and acute power shortages along with several other factors like rising cost of doing
business on the other hand. There was negative growth all around in all major groups with
one or two exceptions.

Effects on traffic of country:

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The intermittent load-shedding, is causing traffic jams as traffic signals remain switched
off due to power cuts. The city plunges into darkness with the approach of dusk while the
hide and seek of electricity continues for the whole night leaving a deep impact on the lives
of the general public.

CONCLUSION:
The energy demand is expected to increase by 7% annually. The government estimates that
by 2010, Pakistan will have to increase its generating capacity by more than 50 percent to
meet demand. However, no projects are currently in the works for new energy generation. In
comparison to the rest of the world, Pakistan has meager energy needs. Pakistan's per capita
consumption is a fifth of the global average, yet the country has failed to meet its needs.
According to my research the country is facing very savior energy crisis if it becomes
continuous the industry will come to a standstill and as a result Pakistan's economy will
collapse. Survival of people will become impossible. We may then have to import energy
from abroad and that will cause a lump sum of foreign exchange.
I have discussed almost all areas which is affected due to this crisis but its future results are
terrible. The grip of a serious energy crisis that is affecting all sectors of the economy and the
various segments of the society. Such circumstances would definitely increase the ratio of
unemployment, which is the main cause of terrorism and extremism in the region.
CNG station are dead as no gas is available, forcing users to switch on petrol which cause
more import of petrol means more deficits in balance of trade .Condition of export is
terrifying as future of export is in danger, continuous delay in shipment compel foreign
buyers to switch to another market.
Long power cuts have sucked the life. In the scorching heat, it’s getting harder to breathe and
still the frightening hot and brutal months of June, July and August are yet to come and
Pakistanis are already trembling in the dark.
VISION 2030

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RECOMMENDATION

Pakistan is in the situation stands to-day; there are hardly any immediate solutions to resolve
the issue. A change of attitude and a change of life style is needed at the national level which
should be triggered by the ruling elite and followed by all segments of the society that have
access to electricity. At best there could be some short and long-term solutions to the crisis
but they need immediate planning and execution with an enormous investment.

SOLUTIONS:
• Focus should be on producing cheap electricity by using domestic resources of coal and
hydro power and renewable resources of wind and solar energy. Dependence on oil and
gas should be reduced to bare minimum because of fluctuating prices of former and
domestic needs of latter.

• Coal is yet another valuable domestic source of producing electricity. Coal deposits in
Thar are one of the largest in the world. They have a high component of sulphur that can
be cleaned and electricity can be produced by converting coal into gas.

• The solar energy resource has been calculated at 800 million megawatt while its
estimation for our country is about 100,000 megawatts, as Pakistan is the 6th luckiest
country in the world where sun-availability is up to 16 hours on average.

• To avoid unrest growing any further, until the gap between the demand and supply of
power is met through capacity addition, the available lot of energy should be used wisely
and productively through energy conservation and management.

• Domestic applications of solar power should be publicized and encouraged.

• Utilizing financial resources effectively to make sure Independent Power Producers and
power plants based on oil operate to their maximum capacity.

• Immediate steps should be taken to reduce to transmission losses and power theft

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