Energy needs of various sectors rise

By Tanveer Ahmed

KARACHI: At a time when energy resources are fast depleting, many

sectors’ energy consumption has gone up except for industrial sector,
whose energy needs subsided in the previous year due to decline in
large-scale manufacturing (LSM).

Transport sector - being the second largest sector in energy

consumption- consumed 3 percent more energy in the last financial
year over the previous year due to the growing vehicular traffic and
high CNG intake. Transport’s share in energy consumption rose to 30
percent in FY09 from 27 percent in year FY07 with its dependence on
diesel, petrol and CNG.

Diesel is the main energy source for transport with 64 percent share
and the rest is made up of petrol and CNG for the transport in the
country, revealed Energy Book 2009.

In the last couple of years, industrial sector, which contributes nearly

12 percent to the gross domestic product, share in overall energy
consumption declined by 400 basis points to 40 percent in FY09. One
of the major reasons last year was 8 percent decline in LSM amid
global recessionary woes and energy shortages.

Even if last year was excluded, the declining trend in the energy share
was evident in FY08, which was 43 percent as compared to 44 percent
in FY07. On the other hand, share of transport and domestic sectors-
second and third largest energy consuming sectors after industrial
sector rose by 300bps and 100bps, respectively during this period.
With growing energy shortage in the county, effective allocation of
energy resources to various sectors would be the key concern, Topline
Securities analyst Farhan Mahmood pointed out.

One important aspect, he said is that the energy consumption is not

growing in tandem with the GDP growth, which in turn means limited
energy resources. During the last 2 years (FY07-FY09), share of
industrial sector in the overall energy consumption declined from 44
percent to 40 percent, though still being the largest energy consumer.

The sector relies heavily on gas as major fuel and on the other hand,
oil consumption remained lower as average oil price was relatively
higher during this period whereas the sector was reluctant to pass on
the impact fully to the consumers due to economic downturn. “This
trend could eventually create overhang in long-term because
industries cannot survive without adequate energy supplies,” he said.
Rising demand and supply gap of gas could be a major concern for
industrial sector. Similarly, growing shortage of electricity –largest
source of energy for industrial sector after gas and coal, could be
another negative factor. Analysts said that to meet energy shortfall it
is evident that the government will be focusing more on short-term
measures and rely on imported energy like oil and new oil-based
power plants.