Pakistan clamps down on night trading to save energy

Islamabad — Pakistan’s government ordered all malls and markets to close by 8.30pm among other measures in a new energy conservation plan, defence minister Khawaja Asif said on Tuesday, as the country grapples with an economic crisis.

The country’s foreign exchange reserves barely cover a month’s worth of imports, most of which are accounted for by energy purchases from abroad, with funds expected under an IMF programme having been delayed.

Asif told journalists the cabinet-approved measures to shut markets, including restaurants, aimed to save the cash-strapped country about 62-billion Pakistani rupees ($273m).

Additional immediate measures included shutting wedding halls by 10pm daily. Asif said some market representatives had pushed for longer hours, but the government decided that earlier closure was needed.

Asif also said Prime Minister Shehbaz Sharif had ordered all government departments to reduce electricity consumption by 30%.

The move comes as Pakistan struggles to quell default fears in domestic and international markets, with a $1.1bn IMF bailout tranche stuck due to differences over the ninth programme review, which should have been completed in November.

Other critical multilateral and bilateral financing avenues are also linked to the IMF programme, which means the South Asian nation of 220-million people is hard-pressed to meet external financing needs of more than $30bn until June 2023, including debt repayments and energy imports.

Total liquid foreign exchange reserves stood at $11.7bn — $5.8bn with the central bank — late last month, having fallen 50% in 2022.

The energy conservation plan also included banning the production of energy inefficient bulbs and fans from February and July, respectively, Asif said.

Pakistan’s peak summer electricity usage was 29,000MW compared to 12,000MW in the winter, mainly due to the use of fans in hotter months, he said.

Half of the street lights across the country will remain switched off as a “symbolic” gesture, the minister said.

Most of Pakistan’s electricity is produced using imported fossil fuels, including liquefied natural gas, prices of which have rocketed in recent months.

The government has tried to stabilise the economy by containing imports and decades-high inflation. A fast depreciating currency has made imports more expensive while consumer prices rose 25% year on year rise in the first half of the current fiscal year. 

Reuters