Daylight saving, 2-day weekend back on the table

Govt to enhance gas supply to power plants to reduce cost of power generation.

ISLAMABAD:

The government has decided to table an energy saving plan comprising two holidays a week, closure of shops at 8 pm, advancing clocks by one hour and turning off street lights at night at an energy summit scheduled for May 25 and 26.

Gas distribution between provinces will also be discussed at the summit that will be chaired by Prime Minister Syed Yousaf Raza Gilani and attended by all chief ministers to develop a consensus on the proposals.

The government is also working on a plan to enhance gas supply to power plants with an aim to reduce the cost of power generation, sources said, adding this would imply that the existing gas load-shedding plan for CNG stations will stay in place for now. Earlier, the government had announced a reduction in gas load-shedding for CNG stations after June.

The cost of electricity produced by gas is 50 to 60 per cent less than that produced using furnace oil, according to sources in the ministry of water and power. While a unit of electricity produced using natural gas costs between Rs3 and Rs5, a corresponding unit produced using furnace oil costs between Rs13 and 18. The government is also considering issuing a warning to inefficient power plants to either improve their generation capacity or face closure, sources said, adding that reduction in the subsidies to the power sector will also be discussed.

The energy saving plan implemented last year resulted in a fall in electricity demand by 1000 to 1300 MW per day. The advancement of clock by one hour added another 250 MW to the fall in demand.

Punjab is expected to oppose the proposal of two weekly holidays on grounds that it would negatively impact national productivity, sources told The Express Tribune.

They added that Punjab is also expected to take up the issue of gas distribution formula among provinces. Sindh and Khyber-Pakhtunkhwa had obtained stay orders from their respective high courts against gas load shedding.

The summit will also discuss the allocation of all gas from new discoveries, including the Kunar-Pasakhi Deep gas field, to the power sector. The Economic Coordination Committee of the cabinet has already agreed to this, sources said, adding that “the decision has not been implemented yet due to the opposition of the petroleum ministry.”

The ministry fears that such a move would lead the gas utilities – Sui Northern Gas Pipeline Limited and Sui Southern Gas Company Limited – to default on their commitments to other sectors, including cement and fertilisers, which had inked gas sale agreements with them, sources added.

The government recently raised the power tariff for May by 2 per cent while another 2 per cent hike will take place in June, to reduce the subsidies paid to the power sector. The raise was in addition to Re1 per unit charge allowed by National Electric Power Regulatory Authority on account of fuel surcharge adjustment for May.

The government is required to increase the tariff by another 16 per cent to recover full cost of power generation and end the Rs144 billion it currently pays to the sector in subsidies.

Published in The Express Tribune, May 11^th, 2011.