Muneeb ur Rehman

Pakistan is currently heavily dependent on expensive imported energy. Proper implementation of the energy conservation plan can significantly help reduce the excessive outflow of dollars. Talking to WealthPK, former head of department at the Pakistan Institute of development Economics (PIDE) Dr. Usman Mustafa emphasized the need for effective implementation of the energy conservation plan of the federal cabinet. He said low demand for energy will put less burden on the foreign exchange reserves for production of thermal energy.

According to the State Bank of Pakistan, the foreign exchange reserves have plummeted to $4.3 billion, which is not enough to meet the demand for even necessary goods in various sectors of Pakistan for a long period of time. The energy conservation policy was adopted by the federal cabinet keeping in view the extremely low foreign exchange reserves. The policy relies on the energy-saving measures, including closure of markets and marriage halls early in the evening and less use of electrical appliances in the government offices.

The policy also includes a ban on inefficient electrical tools like the traditional fans, bulbs, and air converters that consume more than 80 watts of energy. Dr Usman said as per expectations of the government, the plan had the potential to ease burden on the foreign exchange reserves by up to $1.15 billion.

According to the Economic Survey of Pakistan, crude oil accounts from almost one-third of Pakistan’s import bill. During the Fiscal Year 2021-22, the oil import bill increased by 95.9 percent to US$17.03 billion from July to April compared to US$8.69 billion during the same period of the previous year.

Dr Mustafa highlighted the need to utilize the foreign exchange reserves saved from the conservation policy for import of necessities such as medicines and food. He said the National Energy Efficiency and Conservation Authority (NEECA) should ensure production of efficient electricidal tools. In view of increasing pressure on the foreign exchange reserves, it is necessary to implement the conservation plan in its true spirit.

Credit: Independent News Pakistan-WealthPk