Engineer Arshad H. Abbasi, a visionary in the energy sector and CRSS advisory board member, pioneers a groundbreaking plan, addressed to the Chief of Army Staff (COAS), to cut back on Pakistan’s LNG dependency, heralding a new era of eco-friendly and fiscal progress for the country.
Dear Chief of Army Staff, Syed Asim Munir Ahmed Shah HI (M),
I trust this letter finds you in good health and high spirits. I am writing to draw your attention to a viable and pragmatic plan to address Pakistan’s critical gas shortage, a matter of immense importance for our nation’s economic stability.
As the head of the ‘Special Investment Facilitation Council (SIFC),’ tasked with addressing economic challenges, you are well aware of the precarious state of Pakistan’s energy sector. The circular debt in the energy sector, currently standing at Rs 4,500 billion without interest payments, poses a significant threat to our economy.
Recently, the government announced a substantial increase in gas tariffs, reaching 193% for households and various economic sectors, as a measure to mitigate the circular debt in the entire energy sector. The finance minister announced on November 15, 2022, that gas prices will rise in January 2024 as a result of Pakistan informing the IMF about the power tariff review. Because industrialists are expected to adjust their product prices to pass on the impact of high costs to end-consumers, this unprecedented hike in gas tariffs will accelerate the already high inflation to 24.5% in the current fiscal year.
With only 72% self-sufficiency in domestic gas production and a yearly decline of 7% in natural gas production, the import of LNG has become necessary to meet the growing demand. In October 2023 alone, $355 million worth of LNG was imported to bridge this gap.
In light of this challenging scenario, I propose an innovative solution that can substantially reduce the costs of LNG imports. Through a single click, I can immediately cut these costs by at least $24 million, or Rs 7 billion, annually. Moreover, with the opportunity to implement this plan, I am confident in gradually decreasing the import of costly LNG by up to 50% over the next three years, resulting in additional savings of $2 billion, or Rs 580 billion, annually.
For the past two years, I have been successfully demonstrating this solution at my own residence, where I have eliminated reliance on gas from the national grid using a smart solar model. I intend to replicate this model nationwide, significantly reducing capacity charges, which currently amount to Rs 1.3 trillion due to idle power plants. However, the key component of my plan is that the GOP will NOT MAKE ANY INVESTMENTS OR EXPENDITURES OF ANY KIND (ZERO INVESTMENT).
To further support this initiative, I will present my action plan to the UN Development Program (UNDP) to get the GoP secure millions of dollars in Carbon Credits. This not only aligns with our country’s goal of a 50% reduction in emissions by 2030 but also opens up a substantial economic opportunity for investors. With the UN’s help, I do not doubt that other countries will replicate this Pakistan-made model.
Just a brief reminder to be aware of my strengths in the gas sector as well. I am the same Arshad H. Abbasi who, through intense effort, brought the price of LNG from Qatar down from 18% of Brent to 13.37%. The GOP is fully aware of my efforts, which have so far helped Pakistan save nearly Rs 600 billion. You can confirm my statement by looking up the GOP record. In conclusion, I am the author of Pakistan Energy Vision and Shale Gas in Pakistan. I am also presumably the only Pakistani who has received training in Marcellus Shale Gas in the United States.
In the past, many military leaders have shown themselves capable of acting like statesmen. You have been called a “thinking” general. You can rise to the occasion and prove it by instructing the Ministry of Energy to adopt this ready-made model at the earliest to start a new trajectory for the national economy.
I’m eager to collaborate closely with the Ministry of Energy and SIFC to fulfill your goal of reviving the national economy.
