Pakistan managed to pay the highest ever price of $30.60 mmbtu for a Liquefied Natural Gas (LNG) cargo to stave off a gas shortage in the coming winter. This cargo is to take the place of a cargo on which commodity trader and energy giant Eni reneged on their commitment to deliver the cargo they had promised. The situation is critical enough, but what makes it so shameful is that there was a similar crisis last year, and there had to be panic buting then too. It seems the government learnt nothing from that debacle, and went ahead and signed an agreement with partners it apparently did not know the track record of.
One of the factors for the needless crisis is that the government still has a monopoly over the import of LNG. In principle, the private sector has been allowed to import, which would include taking on the responsibility of ensuring that suppliers are reliable. However, while the government has paid lip service to the idea of private imports, it has used the complicated LNG storage and regasification process as an excuse for imposing deadlines which cannot be met.
In principle, the PTI government had the right idea in bringing in advisers from the sector in Nadeem Babar and Tabish Gauhar, but they have both resigned under clouds, showing, it seems, that the PTI does not choose experts wisely. Hammad Azhar, the Energy Minister, seems hapless in the entire crisis, which indicates that good intentions are apparently not going to be enough to ensure that people’s cookers and geysers keep alight this winter. The old excuse, put forward by the PTI’s supporters, that the PTI needs time to learn, will no longer wash. Surely now in its third winter, the PTI can be expected to know what are the problems of the winter, and be able to tackle them. The issue with experts is that they usually bring along both biases and friendships. This applies to any sector, and the PTI has gained more experience than most in this. The more usual combination of political leaders and bureaucrats would probably be best able to deal with issues, rather than the fly-by-night whizz kids and carpetbaggers the regime seems to favour.
