October 30, 2021: The Pakistan Economy Watch (PEW) on Saturday said there is no chance of a reduction in oil and gas prices on the world market over the next few years which may result in a global recession.
The global energy crisis with the potential to intensify Pakistan’s compounded crisis looming on the horizon, it said.
The government should redouble efforts to find oil and gas in the country and try to remove obstacles in import of gas from Iran and central Asia otherwise masses and economy will suffer, said Dr. Murtaza Mughal, President PEW.
During the pandemic leading experts estimated that oil and gas demand will never reach the pre-pandemic levels which proved wrong and now increasing demand has created serious problems for oil importing countries, he added.
In a statement issued here today, he said that oil companies were under pressure to improve the environment but cutting emissions therefore these companies reduced investment in the energy sector which plummeted to a fifteen-year low of 350 billion dollars last year.
He said that the latest OPEC report has said that the oil sector needs investment of almost 12 trillion dollars until 2045 otherwise prices will rise while Bank of America has predicted that oil prices can jump to 100 dollars a barrel by September 2022 or even before it.
Dr. Murtaza Mughal said that Pakistan badly needs gas from Iran and Turkmenistan as the LNG import project is suffering due to bureaucratic hurdles.
He noted that Iran and Venezuela have ample oil and gas but both the countries are under sanctions. Both the countries can stabilize the prices if sanctions are lifted, he said.
Avoiding urgent action will help rising energy prices to seep further into Pakistan as the country’s economy is highly dependent on imports and fossil fuel supply security.
“Rising prices of energy products will translate to higher inflation and being an importing country, Pakistan will be importing further inflation from abroad,” said Dr. Mughal.
He warned that the country might experience a shortage in food production, factories can be expected to shut down, and foodstuffs costs will soar even higher, not only due to the currency crash but also as a consequence of the global rising energy prices.
Petrol, diesel prices hike burning a hole in common man’s pocket therefore the government should do something to save the poor from the shocks, he demanded.
