"Russia and Pakistan Join Forces to Meet Growing Oil and Gas Demands"
Cold War-era rivals, Pakistan and Russia, are now collaborating to meet Russia's growing oil and gas demands. Analysts have welcomed the move with caution as Pakistan prepares to purchase crude oil, petrol, and diesel from Russia at a discounted price starting in March.
The procurement of oil has been at the center of Pakistan's politics for some time, particularly after former Prime Minister Imran Khan's visit to Moscow last year. However, despite the understanding with Russia, the country will only partially be able to mitigate its rising energy demands, according to energy expert Samiullah Tariq.
In this article, we will delve deeper into the agreement between Russia and Pakistan and its potential impact on the country's energy sector.
Energy Crisis Across the World:
The ongoing energy crisis across the world has been a significant concern, particularly after the invasion of Ukraine last year. The US, being Pakistan's long-time ally, is unlikely to object to the agreement with Russia, as several US allies from South America to Asia have opted to meet their energy needs through Moscow.
Munawar Hussain Panhwar, an associate professor of international relations at Quaid-i-Azam International University, believes there is a tacit agreement between Islamabad and Washington on this issue. Moreover, Moscow's condition for payment of oil in the currencies of "friendly" countries is expected to benefit Pakistan, as it will help improve the country's depleting dollar reserves.
The Impact of the China-Pakistan Economic Corridor (CPEC):
Power breakdowns have been a common occurrence in Pakistan, primarily due to poor infrastructure and lax maintenance standards. In summer, the country's electricity demand jumps to 28,000 megawatts, leaving a supply gap of 4,000 to 6,000 MW. The demand and supply gap in winter is 8,000 MW.
Pakistan has significantly improved its power capacity by at least 14,000 MW after the implementation of the multi-billion-dollar China-Pakistan Economic Corridor (CPEC) project in 2015. The largest component of the $64 billion mega project is power generation, which is followed by infrastructure development.
Economic and energy researcher Farhan Mahmood supports the view that the country has the capacity to cope with its energy demand. However, the rising petroleum and gas prices, combined with primitive distribution and transmission systems, are major obstacles to meeting the actual requirements.
The Need for Renewable Energy Sources:
Quoting last year's oil import bill of $26 billion, energy expert Samiullah Tariq stated that the country needs to shift as much as fast to renewable energy sources, mainly solar and wind, to meet its requirements. The lion's share of imported oil is used for electricity production, which is causing cascading effects on the country's already ailing economy. This share needs to be curtailed and shifted to local gas and renewable energy sources, according to Tariq.
Reductions in oil consumption and reliance on renewable energy sources will have a two-way benefit for the country. It will not only reduce the flight of dollars but also prop up the country's sluggish industrial sector, according to Farhan Mahmood.
Improving the Utilization of Power:
Pakistan has less industrial activity than it has power capacity, and power plants incur high operational costs even when they do not produce electricity, primarily during the winter. Farhan Mahmood calls for improving the utilization of power, especially in winter, through industrial activities.
In conclusion, the agreement between Russia and Pakistan is a step in the right direction to mitigate the country's
Key Takeaways:
- Pakistan and Russia are collaborating to meet Russia's growing oil and gas demands, with Pakistan purchasing crude oil, petrol, and diesel at a discounted price starting in March.
- The ongoing global energy crisis, combined with rising petroleum and gas prices, are major obstacles to meeting Pakistan's energy demands, which have improved since the implementation of the China-Pakistan Economic Corridor project in 2015.
- Experts believe Pakistan needs to shift to renewable energy sources, mainly solar and wind, to reduce its reliance on imported oil and improve its economy.
- Improving the utilization of power, especially in winter, through industrial activities, is also necessary to meet Pakistan's energy demands.
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