Imported fuel for power generation: Nepra blames forex scarcity for load-shedding

ISLAMABAD: Chairman National Electric Power Regulatory Authority (Nepra), Tauseef H Farooqi said on Tuesday that one of the key reasons for power load-shedding in the country is scarcity of foreign exchange to import fuel as Pakistan’s 63 per cent generation is based on imported fuels.

He was responding to questions raised by Members of Senate Standing Committee on Power regarding prolonged forced load shedding in the country in the summer.

Senior Joint Secretary, Power Division, Alam Zeb Khan, who was alone from Power Division to face angry Senators, claimed that electricity shortfall is over 8,000-MW.

Fuel cost of power generation surges 24.6pc in April

However, Chairman Nepra noted that Pakistan’s installed capacity stands at 43,775 MW. The country’s current demand is 27,000 whereas generation is 21,000 – 22,000 MW, which implies that shortfall is between 5000-6,000 MW.

He said, 30,000 MW has been transmitted through the system and with addition of new transmission lines from south to north the capacity to transmit electricity has further improved.

Giving reasons for the load shedding, Chairman Nepra said that Pakistan’s 63 per cent generation is based on imported fuel, but the government does not have enough dollars to import fuel. Currently, generation cost is Rs 33 per unit. The electricity cost of RLNG-fired power plants is Rs 24 or Rs 24.5 per unit.

He further contended that when price of imported fuel is increased by 10 per cent, and if the rupee-dollar parity is 280, then it implies that cost of imported fuel generation has increased by 20 per cent. He further stated that electricity prices have increased over 100 per cent over the last one year.

The country’s power sector circular debt, which was Rs 2.646 trillion as of May 31, 2023 is expected to decline to Rs 2.370 trillion as of June 30, 2023.

“Purchase of fuel has now become very difficult for us due to foreign exchange issues,” he said adding that generation from Thar-coal is a blessing in disguise due to which cheap electricity is being produced.

Chairman Nepra once again opposed power load shedding based on Aggregate Commercial and Technical (AC&T) losses.

Chairman Standing Committee Senator Saif Ullah Abro asserted that since the government is paying over Rs 1 trillion capacity payments to Independent Power Producers (IPPs), the government should do away with load shedding in this scorching heat.

Secretary Power Division, Rashid Mehmood Langrial and joint Secretary (Transmission), Hadayat Ullah did not appear before the Committee despite a clear message from Chairman of the Committee that both officers be summoned.

During discussion on “dicey” 765-kV Dasu transmission line contract, the Committee decided to convene an in-camera meeting as NTDC top brass refused to share bidding documents of the project due to World Bank confidentiality clause, which is extending a loan of $ 800 million.

An interesting aspect of Committee proceedings was that the Chairman Standing Committee who had been accusing local officials of World Bank and the NTDC team for a “dicey” contract changed his stance. “Don’t drag the World Bank that is also doing projects across the country including Sindh, in this controversy as NTDC’s team is responsible for reported mis-procurement,” said Abro.

The meeting was attended by Senator Fida Muhammad, Senator Saifullah Sarwar Khan Nyazee, Senator Prince Ahmed Umer Ahmedzai, Senator, Haji Hadayatuallh Khan, Senator Bahramand Khan Tangi and Senator Sana Jamali.

Copyright Business Recorder, 2023