ISLAMABAD: Finance Ministry has, reportedly, expressed its inability to arrange funds to cover more than one month's import of furnace oil critical for power generation during gas curtailment period, well informed sources told Business Recorder. Pepco, as announced by the Finance Minister, will be wound up by October 31, 2001 and Central Power Purchase Agency (CPPA) will take this assignment.
Pakistan is bracing for the worst ever power and gas shortages in winter and political analysts and top officials fear that people will come onto the streets against the incumbent government for outages. "We can provide funds maximum for one month to import furnace oil during gas curtailment period for which approval of the Economic Co-ordination Committee (ECC) of the Cabinet is necessary," the sources quoted Finance Ministry as writing to the Ministry of Water and Power.
Acute gas shortage will be experienced in December 2011, January 2012 and February 2012, which the main opposition, especially Pakistan Muslim League Nawaz (PML-N) can use to mobilise the masses and compel it to hold mid-term elections before the scheduled march Senate elections. Ministry of Petroleum and Natural Resources has clearly indicated to the government that there will no gas for industry, fertiliser and Compressed Natural Gas (CNG) sector during winter.
Petroleum Ministry which is preparing gas load management plant 2011-12 fears 60 days gas load shedding in winter instead of 45 days. Projected demand supply position of natural gas is as follows: in 2011-12 supply is 4,172 mmcfd against demand of 5,777 mmcfd, showing a shortfall of 1,605 mmcfd. In 2012-13, supplies will be around 4,372 mmcfd whereas demand will be 5,995 mmcfd indicating shortfall of 1,622 mmcfd. In 2013-14, shortfall will be 1,880 mmcfd, followed by 2,495 mmcfd in 2014-15, 3,038 mmcfd in 2015-16, 3,542 mmcfd in 2016-17, 4,000 mmcfd in 2017-18, 4,424 mmcfd in 2018-19, 4,799 mmcfd in 2019-20 and 5,247mmcfd in 2020-21.
The federal cabinet has recently been informed that industrial production losses have been recorded at 2 percent of the GDP, circular debt has accumulated to Rs 300 billion while the power generation infrastructure and oil refineries are running much below their capacity. It was stated that only 14,500 Megawatts are being supplied to the distribution network while demand is around 19,000 Megawatts.
It was further revealed that the committee has also examined the tariff structure, the element of subsidy and non-recovery of outstanding bills, which had culminated in the accumulation of circular debt. The Committee specifically focused on issues related to demand-supply gap, fuel mix, power generation options, role of the key power sector players, power sector financing mechanism and the factors leading to the recent power crisis.
The cabinet was informed that the recent electricity crisis was mainly due to reduction in hydel power generation by 3000MW, loss of 2000MW due to fuel and gas shortage and tripping of the Chashma Nuclear Power Plant; hence the power generation dropped by 5000MW, thereby further reducing the availability of electricity to the lowest ebb of 9000MW against un-seasonal increase in demand by further 2000MW.