While 30 days-temporary period of fuel supply to Karachi Electric Supply Company (KESC) by Pakistan State Oil (PSO) has completed on Monday, both parties are yet to develop consensus on the long-term 'Fuel Supply Agreement (FSA)'. Though an agreement was the need of the hour before April 20, after the completion of temporary period, the parties were still negotiating terms and conditions that might cause severe power outages in the city, sources told Business Recorder on Monday.
Although Governor Sindh Dr Isharatul Ibad had recently instructed Karachi Electric Supply Company (KESC) to have the FSA with Pakistan State Oil (PSO) to ensure scheduled load shedding of three hours in the city soon, the company was yet to make progress in this regard, sources said.
According to sources, KESC had so far been supplied fuel at a cost of Rs 800 million, which the company paid by getting a loan from National Bank of Pakistan, and for further supply the company needed to enter an agreement with PSO. However, the official spokesperson of PSO claimed that both parties were negotiating on the terms and conditions of agreement, which was likely to be signed within the next few days.
For the fuel supply during the next few days before the agreement, the spokesperson said, PSO has made arrangements regarding the supply as there was mutual understanding and co-operation between the two firms. Furthermore she said that the oil marketing company would continue the supply, as there was no issue of dues so far as the privately run utility had already paid the amount for the supply of 30 days.
KESC was given the enhanced credit facility of Rs 2 billion till April 20, 2010 as per the decision of a meeting of Federal "Cabinet Committee on Energy Crisis" held under the chairmanship of Federal Minister for Water and Power, Raja Pervaiz Ashraf, in Islamabad on March 19.
PSO, which had stopped the supply of furnace oil to KESC on non-payment of dues of over Rs 3.5 billion, agreed to continue the supply after the intervention of federal government. The Rs 2 billion credit, what the sources said, was enough for its daily consumption of oil of around Rs 7 million.
KESC, sources said, was also negotiating with Sui Southern Gas Company (SSGC), which according to the decision in Islamabad was also to supply around 50 MMCFD additional gas to KESC by April 20. But what the sources said, KESC was also not likely to get the additional gas within the given date by SSGSC. According to sources KESC was receiving around 205 MMCFD on Monday, out of the demanded supply of 280 MMCFD.
However, the official sources at SSGC refused to comment on the issue saying that the related information could only be shared during office timing. Though, according to the decision on March 19, KESC would maintain it's one-hourly three times a day scheduled load shedding regime for the time being for its residential and commercial customers, whilst continuing to exempt industries and various Strategic Customers/ Sensitive Installations from scheduled load shedding. But during the period of 30 days the company had decided to increase the load shedding by 30 minutes more in the areas where reportedly the rate of power theft was high and the citizens were facing five to six hours of power outages presently.
However, the official sources at KSEC could not be contacted for comments as they were reportedly busy in Islamabad in a 'two-day energy summit' where, what the sources said, the possible curtailment of the power supply from WAPDA to KESC is to be defended by them.
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