Balancing act: Power ministry seeks Rs90b for oil purchase

Electricity shortfall stands at 3,700MW due to closure of canals.

ISLAMABAD:

As the country faces an acute power shortage due to drop in hydropower production, the Ministry of Water and Power has requested the prime minister to immediately release Rs90 billion for purchase of an additional quantity of oil for thermal power plants, which will help reduce outages in the current month.

A senior official of the ministry told The Express Tribune that in a meeting of the energy committee, held on Monday to review the energy situation, it told Prime Minister Yousaf Raza Gilani that power shortfall had risen to 3,700 megawatts per day following decline in hydropower generation due to closure of canals for annual maintenance.

“We immediately need Rs90 billion to arrange fuel for thermal power plants to increase production,” the official said, adding power generation stood at around 8,000 megawatts compared to demand of 11,500 to 12,000 megawatts.

“After closure of canals on December 26, hydropower generation has dropped to 1,500 megawatts compared to capacity of 6,500 megawatts,” the official added.

The demand for funds came as the cash-strapped oil marketing company, Pakistan State Oil, seems not to be in a position to make additional imports of furnace oil. At present, receivables of PSO from power companies and other buyers stand at around Rs184 billion. PSO is currently supplying 20,000 tons of oil per day to the power companies.

According to a statement issued by the Prime Minister House, the energy committee reviewed a contingency plan for power generation during the annual canal closure for desilting purposes.

The prime minister directed the committee comprising the finance minister, water and power minister, petroleum minister, State Bank governor and Planning Commission deputy chairman to formulate a programme for minimising load-shedding and maximising electricity production.

They agreed that steps would be taken to utilise the thermal power capacity with focus on more efficient plants to reduce the cost of electricity production and ease the burden on consumers. They decided to put in place an efficient load management system and manage it in a way that consumers were not impacted adversely by unannounced load-shedding.

Finance Minister Abdul Hafeez Shaikh spoke about the debt swap arrangement being made for power companies to deal with the inter-corporate debt problem.

The prime minister directed the power companies to make extra efforts for the recovery of their bills.

Published in The Express Tribune, January 3^rd, 2012.