Silver Lining Alert: Oil (Brent) crashes on recessionary fears - $120s to $70s

Silver Lining Alert: Oil (Brent) crashes on recessionary fears - $120s to $70s

Verily, with every hardship there is ease. The hardship is unprecedented for Emerging economies at the verge of defaults. It is as if they never emerged on the first place. Nevertheless, global downcycle can provide temporary breathing space. Don't squander it.

Pakistan's energy woes are paramount and teething thorn with IMF's negotiations. Without blaming IMF, the monstrous Circular Debt is product of our own short comings. The pie needs to be cut hard and fast. Cushion from falling oil prices should be built to deleverage.

Temptations would overshadow rationality as govt at the brink of election might hurry to pass on the "relief" as a "gift". Ideally, exchange losses, IFEM and PDL should be maximized & FX savings should be saved to pay debts or buyback bonds (if possible).

If we cross the current bridge of tariff hikes, road is relatively less bumpy. Reducing transmission, distribution, recovery and theft losses with private management and strong security can single-handedly provide fiscal space.

Nuclear, Thar Coal and Hydel additions would reduce reliance on Imports and provide stable, low FX consuming anf domestic powered fuel. It's sad that transition to EV 2 wheelers is much slower than the potential FX savings. For a while, let's enjoy oil's slippery slope.