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Energy e-commerce seen to reach $266bn trade volume

ASHRAF KHAN

KARACHI: The internet energy marketplaces, a new market force, is expected to reach a trade volume of 266 billion dollars (Rs.14,098 billion) by 2004, e-commerce researchers say.

The energy market is ripe for the Internet as price volatile commodities, the natural gas and oil, will benefit greatly from the new analytical tools that help buyers and sellers analyse purchasing behaviour and market trends in real time. With deregulation loosening up these markets, the Internet will quickly breakdown inefficient practice, they said.

Pakistan, having annual recurrent import of oil worth about two billion dollars, can greatly benefit from the e-commerce facility in inviting bidding process, they said. The country invites bids at least three months in advance of its import needs.

New marketplace models would dominate on-line trade, including exchanges, aggregators, auction and bid system, they said. It is believed that majority of on-line energy trade will be executed via exchanges, which fulfil buy-and-sell needs for on-line industry players. Sales flowing through exchanges will surge to 171 billion dollars (Rs. 9,063 billion) in 2004 by providing wholesalers Ñ the largest sector in energy Ñ with real-time market information and quick fulfillment.

The government's untimely policy decisions, especially with regard to petroleum price adjustment, brought it embarrassment, they said. The time factor, they said, affected negatively in meeting its budgetary targets of development surcharge collection from petroleum products, they said.

The on-line marketplaces will bring about higher level of efficiency in wholesale markets and enable energy buyers to understand market data on a deeper level.