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November 26, 2020

Massive losses

Editorial

 
November 26, 2020

The country has had to face huge losses – in billions – that were completely avoidable and could have been prevented if only our policymakers had acted on time and had provided correct information to the prime minister. The petroleum sector alone is one example of the ineptitude of ministers as well as the misinformation provided to the media. And, instead of accepting responsibility, ministers have attempted to hold the bureaucracy, media or past governments responsible. The details of this were disclosed by Shahzeb Khanzada in his daily show on Geo TV on Tuesday. There is a big question over why the purchase of LNG was not made in July when it was available at 5.7 percent. Instead, the commodity was purchased in August when the rate had risen by 9.3 percent making it much more expensive. The same error or neglect was repeated when LNG was purchased for September in August. By this time, it had once again risen sharply.

Government teams have blamed K-Electric for making a demand at a late stage but there is evidence which suggests there was no delay on the part of K-Electric. The government also denied K-Electric gas from SSGC and mentioned that there was no prior agreement on this. That confusion led to a severe power crisis in Karachi. A previous agreement in 2018 had offered K-Electric gas from SSGC. Government advisers and ministers have also said that Sindh had not allowed a pipeline essential to the provision of gas to be laid in the province, but again there is no evidence of this.

There are also questions over the purchase of furnace oil, the import of which the prime minister had at one point banned, and said that cheaper power should be generated through coal and LNG. Despite this, K-Electric’s shortfall was met through the purchase of furnace oil because LNG had not been purchased on time. Then there is also confusion about PSO’s requirement for furnace oil and whether or not this was imported.

The crux of the problem lies in the failure to put in place sensible decision-making which would benefit the country rather than ignore requirements put forward by various agencies in advance. The result has been a huge loss for the national exchequer. While ministers concede meetings were held, there appears to have been no change in government policies. Even when cheap LNG is available globally, expensive furnace oil is bought. The same incompetence has led to severe wheat and sugar shortages in the country. There is concern that misinformation is placed before the prime minister and the true picture not presented to him. This is obviously not a good way to run a country or manage governance. More attention by ministers to the problems and timely actions on their part could have saved the country billions of dollars which are badly needed by our resource-starved economy. Those responsible need to be questioned about their decisions and about the information they gave out regarding the matter.