The rise in international oil prices to a 14-year high this week is cause for concern. While the rise is attributed to a crisis of supply from Russia, its tremors will be felt all around the world and Pakistan is no exception.
It is feared that this would adversely affect the balance of payments as well as push up inflation in the coming months. This is bad news for the common man. More must be done to reduce Pakistan's oil import bill, currently standing at about three billion dollars annually.
Over 70 per cent of this comprises furnace oil, which is used primarily by the power generation and cement industries. With 85 per cent of the country's oil consumption being met by imported fuel, the policy to rely more on indigenous fuel resources will help bring down dependence on oil imports.
The second largest fuel imported is diesel. This is used mainly by the transport sector. The government is now working on a plan to convert public transport to using Compressed Natural Gas (CNG) in place of diesel.
So far, success in encouraging conversion to CNG has been quite significant as pointed out by the fact that fuel consumption has dropped from 3.5 million tons in fiscal 2001-02 to 1.65 million tons in fiscal 2002-03. More needs to be done to promote switch-over of both industries and commercial vehicles to using gas.
With a success ratio of about 40 per cent, oil and gas companies have been doing very well in terms of exploration and prospecting. In the late 1990s, the discovery of the Sawan, Bhit and Zamzama deposits, all significant finds, helped increase supplies.
Seven new discoveries were made in 2003. This pushed up gas production in fiscal 2002-03 by 7.5 per cent to 993 billion cubic feet (BCF). However, for such exploration activity to continue showing results, the government needs to work more seriously at providing greater security and essential facilities to companies operating in Balochistan, which has a lot of potential but this can only be realized if a conducive environment is created there.
Gwadar-Muscat flights
The discontinuation by PIA of its three weekly flights between Gwadar and Muscat will cause the people of Makran serious hardship. The decision has been taken after refusal by Omani authorities to grant a safety waiver to the national flag carrier for operating Fokker aircraft on this sector.
The turbo-propelled planes are among the oldest being operated by PIA, with their Dutch manufacturers long having stopped the production of the planes and their parts. That PIA continues to operate these aging aircraft on domestic routes should be a cause for concern in itself.
Fokker flights are operated mostly on the Karachi-Makran, Islamabad-Peshawar-Northern Areas and certain provincial sectors, linking remote areas where wide-bodied aircraft cannot land with the main hubs.
Plans are said to be underway to replace these outdated aircraft, but until that happens the Civil Aviation Authority should reassess the planes' airworthiness from the point of view of safety of travel.
As for the discontinuation of flights on the Gwadar-Muscat sector, PIA should be required to make alternative arrangements at the earliest. Standard practice in such cases is to lease appropriate aircraft from a foreign carrier, as PIA has done in the past.
This should be considered without waiting for the purchase of new aircraft, or for the CAA to upgrade the runway at Gwadar, enabling it to take in jet flights. The time and cost involved - flying via Karachi will incur an additional over Rs4,000 - as well as the inconvenience caused to the people of Gwadar travelling to and from Oman should be the airlines' prime consideration.
Being an impoverished region, Makran's historical links with Oman serve as the economic lifeline for many families. These should not be made hard to maintain under any pretext.