fueling the future - Woodrow Wilson International Center for Scholars

The Weight of History: Pakistan’s Energy ProblemTable 2: Distribution of Demand for Power, 2005-2010(Megawatts of electric power)Year domestic Commercial Agriculture Industrial Others total2005-06 7,199 1,216 1,763 5,891 1,035 15,5002006-07 7,585 1,251 1,820 6,481 1,086 16,6002007-08 8,127 1,312 1,893 7,252 1,159 17,9002008-09 8,783 1,354 1,979 8,181 1,243 19,6002009-10 9,531 1,408 2,079 9,267 1,341 21,500Source: Government of Pakistan, Medium-term Development Framework, 2005-15(Islamabad: Planning Commission, 2006)The Musharraf government believes that its policies will lead to areduction by 2009-10 in the share of total supply consumed by households,to 44.3 percent of projected supply. At the same time, the shareof industry will increase significantly—by five percentage points, to43.1. Islamabad has not clarified how public policy would bring aboutthis change.The distribution of sources of energy supply is very different in thecase of Pakistan compared to other countries in the region (see Table 3),only partly reflecting the existence of domestic resources. In spite of theavailability of significant domestic resources of energy such as coal andhydropower, Pakistan has allowed dependence on foreign supplies to increaseto the point at which the burden on foreign earnings has becomeunsustainable. While in 2005 natural gas accounted for slightly more thanhalf of total energy consumption, the shares of hydropower and coal wererelatively small. The burden on foreign exchange was exacerbated by thesharp increase in the price of oil in 2006, when spot prices touched $78a barrel of crude oil during the summer. 5 In 2005, 80 percent of energydemand was met by oil and gas, and oil was mostly imported.As shown in Table 4 below, the current sources of energy supply inPakistan were vastly different from those of several other developingcountries, including neighboring India. While oil and gas supplied fourfifthsof Pakistan’s energy requirements, in India coal alone accountedfor over half of energy used. Hydroelectricity, at about one-seventhof total demand, had a much higher share in Pakistan than in India.| 39 |