The recent energy crisis has greatly subdued the country's economic growth. For sustainable development, Pakistan needs energy security that requires striking a balance between affordability, demand and supply options and loadshedding. The relationship between the three components is dynamic, affected by both internal and external factors. Plans cannot be cast in stone and require continuous updating. One of the major issues that require the government's attention at the highest level is the sourcing and development of the fuels or primary energy sources that are to be converted to electricity. Prudent economics and the NEPRA Act require that the strategy for meeting the demand be based on the least cost option. The cabinet has remained occupied with other matters unrelated to the development of a national power strategy. Previously, this work was handed over to Raja Pervez Ashraf, the Ex-Minister for Water and Power, who had not received even academic exposure either of planning or finance. He was convinced by his party bosses that salvation from the energy crisis lay in acquiring the rental power plants (RPPs). Based on the assurances held out by the power generating companies and the officials of his own Ministry, he announced an impractical deadline for the end of loadshedding. In the same vein, based on his assurance, the Prime Minister announced the date for the end of loadshedding in the National Assembly. In inviting bids for RPPs and finalisation of contracts, all caution and prudence was thrown to the winds. The defective contracts have caused huge financial loss to the country, which is now under scrutiny by the Supreme Court of Pakistan. The crisis highlights the need to take an integrated look at the energy sector given that the current crisis, to a large extent, is a fuel crisis caused by unexpected and unmitigated increase in the Residual Fuel Oil (RFO) prices and delays in ?nding a substitute for the depleting domestic gas supplies. The shortage of gas forces the power generating units to increasingly depend on furnace oil. Its use lowers the efficiency and capacity of plants designed to run on gas. Moreover, the high cost of imported furnace oil, and the resultant increase in per unit cost billed to the consumer, has caused huge unrest in the country. The government, however, remains unmoved by the resentment and is determined to force further price increases down the throat of hapless consumers. Any increase in energy cost and fuels inflation renders Pakistani goods non-competitive in the international market. Due to poor governance, inefficiency and mismanagement, it has not been possible for the Ministry of Water and Power to launch programmes for improving energy efficiency and loss reduction programmes that have the least incremental cost, but have failed to receive the same priority as new supply side initiatives. The energy saved by the proposed Compact Fluorescent Lamp (CFL) programme would reduce generation demand by over 1,280MW countrywide and 1,133MW in the PEPCO system. It is lying in cold storage for reasons that are unconvincing, even to those advancing them. Presently, a number of plants are not contributing power supplies, due to a range of issues such as contractual and administrative reasons and shortage of gas supplies from the national gas grid. If the above issues are resolved, the involved plants could provide 997MW of power to the system. The entire gas policy needs to be reviewed. The combined cycle power plants already established offer one of the least cost solutions. The plants may shut down due to their inability to use expensive high speed diesel, resulting in a loss of 850MW of power. There is an ongoing programme for reducing transmission and distribution losses. The USAID, World Bank and ADB have made funds available for energy improvement projects, as well as to rehabilitate the Genco plants and improve their efficiencies. These programmes need to be given very high priority, as they are least cost solutions for meeting power and energy demand. The circular debt problem has defied all solutions. So long as this crisis persists, it will have a negative impact on the current capacity availability. The functioning of some plants at 20 percent of their installed capacity, and the complete shut down of some others due to the same problem, may have resulted in the loss of several hundred megawatts of power during the past two years. The government is unwilling to publish data on these losses. The existing independent power producers (IPPs) have been operating for over a decade. Since these IPPs are available for generation at marginal cost of energy, instead of two weekly holidays and shut down of businesses at unreasonable timings arbitrarily determined by bureaucrats in the Ministry of Water and Power, efforts should have been made for the utilisation of their maximum contracted ability, which is 84 percent. Of the 15 IPPs, not a single unit was able to operate in accordance with its plant factor. The lower capacity utilisation cannot be attributed to hydel generation. There were other factors responsible for the non-utilisation of full capacity, among them circular debt and non-supply of gas stand out as the main culprits. The writer is a retired secretary of the Government of Pakistan. Email: