There is a positive correlation between energy consumption and economic growth. However, Pakistan’s overreliance on natural gas in its energy mix has caused it to deplete rapidly – gas reserves will finish by the next decade at the current rate of consumption. The unfettered provision of gas to new households and particularly to the fertilizer industry, the highest consumers of gas, has led to the wastage of this resource. Though there has been a significant reduction of gas in the energy mix, gas continues to be wasted through leakages in pipelines. Levying tariffs, inviting investors to bid on energy prices, and taxing gas providers on the difference between the price charged to consumers and the price of purchasing can create incentives to explore new sources of gas to increase its supply.
This study was funded by Adam Smith International (ASI) (2015).
Report: Gas Report