ISLAMABAD - The Overseas Investors Chamber of Commerce and Industry (OICCI) on Monday recommended replacement of inefficient, costly and heavy furnace fuel plants in a phased manner and requested National Electric Power Regulatory Authority to ensure cost reflective tariffs that incentivize investment in the distribution sector.

OICCI President Khalid Mansoor unveiled 'OICCI Energy Reforms 2017' report.

The report proposed to streamline the oil and gas, coal and renewable sector including exploration, refining and distribution. "OICCI members said that Pakistan faces several challenges in the energy sector, including the higher cost of power impacting competitiveness of exports and cost of doing business in Pakistan", said. The report stated that Pakistan's energy consumption is expected to grow by 70 percent in the next 10 years, substantially adding to current $11 billion energy import cost.

Mansoor appreciated the government's efforts for resolving power crisis. He hoped that there would be no loadshedding in the upcoming summer season as country would have additional 5000 megawatt electricity in the national system by June this year. He further said that transmission and distribution losses are high in Pakistan as against the other countries. Transmission and distribution losses are 19.6 percent in Pakistan as compared to 18.5 percent of India, 13.2 percent of Bangladesh, 8.95 percent of Vietnam and 6.24 percent of Thailand.

Mansooor said that Pakistan's energy sector faces many challenges including limited resources, energy mix highly dependent on imported expensive fuels and never-ending Energy shortfall to cater the needs of a burgeoning population and growing GDP.

The report said that pending commissioning of Thar coal and long gestation hydro projects, additional power generation is expected to be based on imported coal and LNG which together with high transmission and distribution losses is going to keep the issue of circular debt and high energy cost under stress for some years to come.

The report also highlights various measures required to boost power generation, transmission and distribution. Presenting the details, Mansoor informed that OICCI Energy Reforms Report has recently been shared with the Prime Minister Shahid Khaqan Abbasi and Water and Power Minister Awais Ahmad Khan Leghari.

OICCI Energy Reforms 2017 Report is an effort of the OICCI to recommend key policy changes required to optimize the available resources as well as putting the energy sector on a fast-track, in line with the economic growth potential of the country.

OICCI Managing Committee member, Jawwad Ahmed Cheema, who is the Chairman of OICCI Energy subcommittee and OICCI Secretary General, M. Abdul Aleem, were also present on the occasion.

The OICCI has 28 members from the energy sector, belonging to oil exploration, refining, marketing, distribution, coal mining and power generation sectors, with an asset base of over Rs 1500 billion.

The OICCI energy companies contribute more than Rs 500 billion annually to the national exchequer and have an annual turnover of Rs 1500-2000 billion and employ a large number of highly skilled professionals in different fields.

In Upstream Sector, OICCI has recommended that indigenous Oil and Gas exploration and production activities should be accelerated to make affordable energy available to the consumers. One of the policy recommendations by OICCI is to segregate Policy and Regulatory functions at the Ministry of Petroleum besides accelerating the award of new exploration licenses, with additional focus on tight gas development, offshore exploration and for introducing marginal field policy. Timely completion of power transmission and distribution projects is critical to uplift the additional generation capacity being added in the system including from Thar Coal Block II which is going to add 4000 MW by the end of 2025.

Giving highlights of the areas for reforms in the Downstream Sector value chain, Jawwad Cheema informed that no policy has been formulated for this sector since 1997. The OICCI report has recommended building new oil refineries, enhancing the existing refining capacity, and improving the fuel specification, import infrastructure, transportation value chain, fair and transparent pricing mechanism, improve quality of OMCs and most importantly to allow only serious players to operate in the downstream sector.

In power sector, LNG is termed as a quick but temporary solution and the government has been urged to move towards self-reliance and indigenization of untapped coal, hydro, wind, solar and tight/shale gas resources.

Looking ahead, the OICCI envisages that by 2020, the energy mix of the country would marginally improve with less dependence on oil and increasing share of LNG, coal and renewable energy. This energy mix can further improve with the judicial implementation of OICCI Energy recommendations in the larger interest of the energy security and economy of the country.

The Overseas Investors Chamber of Commerce & Industry (OICCI) serves as a platform to promote foreign investment, thereby playing a major role in the growth of commerce and industry in the country.

The OICCI is the collective voice of close to 200 members, representing nearly all the largest foreign investors in Pakistan, who come from 35 different countries and operate in 14 different sectors of trade and industry.