The Water and Power Development Authority (Wapda) has requested the government to take steps to import 450,000 tons of furnace oil on emergency basis, stating that this is the minimum requirement only for the current October-December quarter. The demand was made by Wapda through a letter sent to ministries of finance and water and power, Business Recorder reliably learnt.
Wapda, which purchases power from Independent Power Producers (IPPs), has also included the share of furnace oil, which will be used by the latter.
Sources said that the main thrust of electricity generation has been shifted from hydropower generation to thermal due to worsening situation of water availability in major reservoirs.
According to sources, hydropower generation decreased by around 60 percent in the last six months or so.
The worsening situation has forced Wapda to seek special permission for import of furnace oil from the government, which is available presently at around $200 per ton in the international market.
Sources said that total furnace oil import had remained at around 80,000 to 100,000 tons during 2003-04 as the main thrust remained at hydropower generation and the water availability was stable last year.
To deliberate upon the situation, an important meeting is likely to be held on Monday, which will be attended by representatives of the ministry of water and power, Wapda, IPPs, Pakistan State Oil and other oil companies.
Sources said that the government was already providing Rs 15 billion subsidy to the oil companies to offshoot negative impact of surging oil prices in the international market.
However, the furnace oil import is not entitled to have the subsidy from the government and the import will, undoubtedly, increase the electricity tariffs and consumers will bear the burden of such increase.
In September, Wapda had stated that its minimum requirement of furnace oil would be around 150,000 tons for the current quarter.
But Indus River System Authority's (Irsa) recent briefings regarding water availability have forced Wapda to increase its import demand, as the country is poised to face a water shortfall of around 56 percent during the Rabi season.
According to sources, the demand does not include the furnace oil requirements for Karachi Electric Supply Corporation (KESC). The KESC is also likely to make its demand for furnace oil import.
Sources were of the view that due to fluid situation, the ministry of water and power would have to take steps on emergent basis as it is opposing Wapda's loadshedding plan.
Around 350,000 tons of furnace oil is available from local refineries while the requirement may exceed to 1.5 million tons if the water situation did not improve in the country, sources said.