THINGS are about to get very rocky for the PPP-led governing coalition. That is remarkable considering the last two years have not exactly been smooth sailing.

Forget the judiciary, the media and the opposition. This summer the administration will face what may prove to be its nemesis the rolling power outrage.

Of course, there are rolling blackouts all over the country even now and people are already quite agitated. But if electricity shortages do not decli-ne quickly things will get a lot uglier when the mercury rises and people's fuses get shorter. Let us begin by reviewing the problem. A lot has been written on the power crisis afflicting the nation. Here I will attempt simply to summarise the situation. Currently electricity generation is between 4,500MW and 6,000MW lower than the demand despite the fact that installed capacity is only about 1,000MW less than estimated peak summertime demand.

This is due to three different forces dovetailing most awkwardly. The first is the historically low water levels experienced this winter in the Indus, severely hampering hydroelectric power generation. It will take a while for the reservoirs at Tarbela and Mangla to get those turbines churning at full tilt.

Second is Pakistan's transition from a natural gas-surplus country to a natural gas-deficit country over the last few years as households, fertiliser factories, CNG stations and fossil fuel-fired power plants jostle for limited gas supply.

Finally, there is the so-called circular debt problem the inability of power producers to pay oil companies for fuel because of the inability of power distributors to pay power producers for electricity because of the inability (or blatant refusal) of power users — both government and households — to pay power distributors on time or at all. Estimates have put the circular debt at close to Rs100bn.

So what is to be done? Well, there are long-term solutions to Pakistan's energy shortage problems that are in the pipeline. These include the Iran-Pakistan gas pipeline, the Thar coal project and the Diamer-Bhasha Dam, among others.

These, however, will not resolve the short-term electricity shortage that is eating away at the economy every day. Short-term measures need to be taken to defuse the political tension that is already simmering across the country and is threatening to boil over at any point.

So how can the government avert the power crisis from morphing into a full-blown political and economic crisis?

Any and all of the alternatives are diabolical. Politicians, I assume, have nightmares about these kinds of choices. The recent launch of small power plants (with capacities of a few hundred megawatts) will reduce the deficit by small increments in the short run. However, this does not resolve the central problem non-payment for electricity.

The most important thing the government needs to do is find money to pay off the independent power producers. This would induce cash flow into the system allowing for power generation companies to pay off their payables and ramp up generation again.

Since the federal and provincial governments are not sitting on large sums of money, they are going to have to do one of two things. Either borrow money from the financial market (an idea floated by former Finance Minister Shaukat Tarin) or ask for foreign aid (which is what has been committed by the US and the Asian Development Bank recently). This would provide breathing room, but only for a very little while.

Worryingly, matters are likely to get worse in the next few months. As the weather gets hotter electricity demand will reach its height around the same time that international oil prices will hit their summer peak.

So the per kilowatt hour generation cost of electricity will rise with rising oil prices, placing even greater pressure on public coffers that have been used to subsidise the cost of electricity for consumers (domestic, industrial and commercial) for years. This means if the government does not increase electricity prices then we will have another round of circular debt.

Our power struggles boil down to two issues power theft and power subsidies. Transmission losses in the system have been estimated at approximately 30 per cent. Some transmission losses are to be expected as even the most efficient and modern power grids in the world report losses. While no one knows exactly how much, some part of that 30 per cent is power theft, through illegal connections (the infamous kunda) and meter tampering.

The second issue is electricity subsidies, which we — all of us — have been paid since the introduction of fossil-fuel based power generation in the middle of the last decade. The time may have come for our government to tell us that thermal power costs more than hydroelectric power (a lot more when it is furnace oil and not natural gas) and the former supplies nearly two-thirds of our electricity. The new finance advisor, Dr Abdul Hafeez Shaikh, has already hinted that the government may have to increase power tariffs in increments over the next 12 months.

Prime Minister Gilani brought his penchant for consensus politics to bear upon the problem recently by bringing together top federal and provincial leaders for a two-day conference to develop consensus. The result of the conference highlights the kind of lose-lose situation we're in. In order to reduce the hardship of continuous blackouts we have to curtail economic activity.

Next, the administration is going to have to choose between increasing power tariffs or allow more loadshedding. People may revolt against either option. And who is to know whether the newly activist Supreme Court might not strike down any attempts to increase tariffs.

The storm clouds are gathering ominously for Mr Gilani and whether this son of Multan will be standing — with his government still in place — at the end of the summer is far from guaranteed.n

asifsaeedmemon@gmail.com