Causes of energy shortage in Pakistan: An empirical evidence

Mubashir Qasim and Koji Kotani

No EMS_2013_01, Working Papers from Research Institute, International University of Japan

Abstract: We address the causes of electricity shortage in Pakistan by examining data over the period 1971-2010 with time series analysis. The novelty lies in characterizing energy shortage via an index comprising the demands of electricity, gas and oil as well as via the information of public electricity supply. In particular, this index enables a simple empirical approach where energy shortage cannot be directly measured as data. Our main findings are as follows: first, end-consumers adjust their energy demand to the prices only in long run. Second, under-utilization of installed power generation capacity encourages fossil fuel consumption for private electricity. Third, uninterrupted electricity supply could be attained through regulating private electricity generation. Fourth, the relative demand for electricity increases and then decreases with real income in relation to gas and oil. Overall, our investigation implies that price adjustments tactics adopted by the government are not effective policies to deal with power shortage if oriented to short-run impacts. Rather, the government should focus on improving utilization rate of installed power plants and re-channeling the use of oil and gas for public electricity generation. Otherwise, energy shortage shall be worsened with economic growth in Pakistan.

Keywords: energy shortage; energy consumption index; electricity price; oil prices (search for similar items in EconPapers)
JEL-codes: Q57 Q58 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2013-01
New Economics Papers: this item is included in nep-ene
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: An empirical analysis of energy shortage in Pakistan (2014)
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