PIAF urges govt to shut down all expensive oil-based power plants

LAHORE: The Pakistan Industrial and Traders Associations Front (PIAF) on Saturday said that the high cost of doing business has proved to be dangerous for Pakistan’s industry, discouraging investment both in capacity and capability, calling for lessening the burden of heavy taxes on the power sector.

The PIAF asked the government to shut down all expensive oil-based power plants to ensure availability of cheaper energy for consumers.

PIAF Senior Vice-Chairman Nasir Hameed and Vice-Chairman Javed Siddiqi, in a joint statement issued here, condemned the National Electric Power Regulatory Authority (Nepra) for shifting power distribution companies’ inefficiencies’ burden to the consumers by jacking up the tariff by Rs 2.87 per unit under Fuel Charges Adjustment (FCA) for the months of March and Feb.

Nasir Hameed said that constant hike in power tariff on the plea of fuel adjustment has pushed the electricity prices higher and added to the already soaring cost of trade and industry.

According to reports, Nepra, after incorporating several adjustments, reviewed and assessed an increase of Rs 2.86 per unit in the applicable tariff for XW Discos on account of variations in the fuel charges for the month of March.

According to the decision, the power regulator approved Rs 2.8 per unit increase in the electricity rate on account of the FCA to burden the consumers with around Rs 29 billion. The increase in tariff of March shall be charged in the billing month of May this year from all consumer categories of XW Discos.

Javed Siddiqi said that the regulatory authority had earlier increased power tariff by Rs 3.09 per unit on account of FCA for Dec 2021 which placed an additional burden of Rs 30 billion on the power consumers while more than 8.5 billion units of electricity were used in December last year.

He lamented that the previous government did not pay heed to rehabilitation and maintenance of old power plants which caused several system constraints, inflicting heavy losses.

According to the data, the total energy generated in January was 8,797 GWh at a total price of Rs 107.5 billion, which is Rs 12.2199 per unit. Of the total, the net electricity delivered to the Discos was 8420.73 GWh with transmission losses of 330.85 GWh.

The data provided to the Nepra indicates that the most expensive sources of energy generation including high-speed diesel (HSD) and residual fuel oil (RFO) were consumed more than in previous months, which also jacked up the total cost of generation while the least expensive (renewable) share reduced drastically during the month. Interestingly, the share of the RLNG-based power also reduced sizably.

The highest share of energy source in the total pie was of coal. The power generated from coal was 2,916.7 GWh (or 33.15pc) with a cost of Rs 14.1049 per unit. Its cost was also much higher due to price hike in the international market. It was followed by local natural gas and nuclear sources with 14.37 percent (1264 GWh) each, while the gas charges were Rs 7.747 per unit.

The furnace-based electricity was generated of around 1238.11 GWh (14.07pc) with a unit cost of Rs 22.807. The energy generated from imported RLNG was 626 GWh or 7.12 percent of total generation with a cost of Rs 16.703 per unit. The HSD-based energy was generated of 592 GWh costing Rs 25.98 per unit. Interestingly, due to the normal water shortage in dams in the winter, the share of hydropower generation was only 512.94 GWh or 5.83 percent in January.

Copyright Business Recorder, 2022