Energy subsidies cripple Pakistan economy, says study

Energy subsidies cripple Pakistan economy, says study Energy subsidies in Pakistan are contributing to “severe supply problems” according to a report from the country’s Petroleum Institute. Power consumption has grown by 80% over the last 15 years, but a failure to keep up with demand has led to crippling electricity shortfalls. Pakistan spent nearly $3.5 billion subsidising the power sector in the fiscal year ending in June, and the artificially low price of natural gas is creating a problem with supplies. Subsidies contribute to inflated demand and gas now accounts for over 45% of Pakistan’s domestic energy needs. The Institute warns that unless the government allows gas …

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http://link.ft.com/r/0QSDPP/U1LZ5D/OJS3XZ/408AM1/HYYJ6T/9A/h?a1=2011&a2=7&a3=28