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Pakistan The Energy Situation in Industrial Sector


Pakistan: The Energy Situation in Industrial Sector

The industrial sector contributes around 20 percent to Pakistan GDP; it is also a major source of tax revenues for the government and contributes significantly in the provision of job opportunities to the labour force. Apart from the mining and energy industries, important industries, include textile, food and dairy products, fertilizer production, beverages, construction materials, engineering and machinery, pulp and paper, pharmaceuticals, chemicals, and iron and steel.

Executing Partners

NPO, SMEDA, AEDB and ENERCON

Time 4 years (2015 - 2019) 

Issue

Energy supply is becoming a major bottleneck to industrial growth due to the frequent electricity supply interruptions in the country. Consequently, industries have resorted to setting up natural gas and fossil-fuelled captive power plants to meet their energy needs. At the national level, the government has to balance the supply of gas with demand due to industry, transportation, and domestic sectors. This has increasingly led to gas shortages in industries, as the government started natural gas rationing for companies, and in some cases, quotas have been fixed for supplying gas to the industries. This has affected the continuous supply of gas to industries, restricting their ability to run their captive power plants for power generation. In most cases, companies are forced to run their captive power plants on diesel, thereby increasing production costs. The energy shortage has affected   industries’ production and profit, and has hindered their capacities and opportunities to grow.