Power plants are operating at 40% to 50% capacity and there are chances of further drop in production, says official. PHOTO: FILE
“Power companies are already running short of furnace oil and now petrol, high speed diesel and jet fuel may also go short if Rs29 billion is not arranged to clear letters of credit for oil imports,” the ministry said in a recent meeting with the premier.
According to sources, the Ministry of Finance and Ministry of Water and Power have so far not prepared a plan for the release of money, though the state-run oil marketing giant, Pakistan State Oil, requires the amount to pay for oil purchases from April 18 to the end of month.
“After power crisis, fuel shortage for airplanes and transport vehicles may also arise, which can make people restless,” the petroleum ministry said in the meeting. Oil shortage will also lead to grounding of aircraft.
According to sources, the finance ministry, on the other hand, is mulling over adjusting Rs20 billion, which will be paid to the energy sector to ease the strain on finances, in tax refund claims of the Ministry of Water and Power pending with the Federal Board of Revenue (FBR).
“The finance ministry plans to deduct Rs20 billion from the Rs192 billion refund of general sales tax claimed by the water and power ministry from the FBR,” a source said.
So far, the finance ministry has provided Rs261 billion in subsidy to power companies, which is far higher than Rs185 billion set aside for the current financial year. Any further increase in subsidy, which widens the fiscal deficit, may upset the International Monetary Fund (IMF) in an upcoming meeting.
Published in The Express Tribune, April 13th, 2013.
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