Publication details

• Thursday | 26 Mar, 2015
• Vaqar Ahmed, Huma Dad Khan
• Working Papers
• 36

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Vaqar Ahmed and Huma Dad Khan

Abstract:

This paper reviews the investment situation in energy sector of Pakistan. Using secondary data sources, official documents and pledges by development partners, we have made an attempt to provide some estimates of prevalent investment, barriers to future inflows, and reforms required to lure investment in this sector so that energy security may be ensured in the country. Currently, investors are shying away from the energy sector due to fragmented energy governance, low revenue collection, transmission and distribution losses, etc. The role of fiscal policy in promoting investors for energy security in Pakistan needs to be quickly revisited. Key reforms should be (a) FBR may be asked to look into the ‘unbalanced’ slabs of corporate taxation in case of foreign versus domestic investor, (b) the part of the Finance Act 2014 that discourages the renewable and alternative means of energy generation should be removed, (c) business community should be taken into confidence regarding the utilization of GIDC proceeds, (d) processes and procedures involved in the import of petroleum products particularly for raw material should be rationalized, and (e) the issue of untargeted, hidden and cross subsidies in energy sector should be resolved.