The current levels of power cuts - 12 hours in urban and 18 to 20 hours in rural areas - is being made possible through 16,000 tons of furnace oil supplies daily to generation companies, which the caretaker government wants to enhance to 20,000 tons as well as 779 mmmcfd of gas per day, sources told this correspondent on Tuesday.
To enable the import of 16,000 tons of furnace oil, Pakistan State Oil requires Rs 35 billion per month and given the massive circular debt which accounts for poor liquidity in the sector, PSO requires this amount to be directly extended by the Ministry of Finance enabling it to open its letters of credit. The gas demand management plan is carefully prepared by balancing its several users notably domestic sector, captive power plants, power sector, fertiliser, and CNG.
The problem facing the caretakers, analysts argue, is to ensure a supply of funds from the depleted treasury by the Ministry of Finance to the PSO and to ensure that gas is used to ensure optimum output. Failing this, the country is expected to face even a more serious power shortage during the summer months.
An official stated that that PSO''s management had asked the government to provide a letter of comfort from the Ministry of Finance as well as a sovereign guarantee from the government to arrange future furnace oil purchases. Sources in the Petroleum Ministry said that during a meeting held at the Petroleum Ministry relevant quarters were informed that the Ministry was unable to arrange an additional 152 Million Cubic Feet per Day (MMCFD) gas to power sector.
The Petroleum Ministry has directed Sui-Northern Gas Pipelines Limited (SNGPL), Sui-southern Gas Company Limited (SSGC), Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) to work out a detailed plan to provide additional gas supply to power sector so that the country could be prevented from any untoward social incident this summer. The government has already extended Rs 291 billion as subsidies to power sector.
The government is focused on providing four private power houses namely Orient, Halmore, Saif and Saphire 38 MMCFD of gas which could produce up-to 800 megawatts of electricity, but so far no arrangements have been finalised. At present, power houses are consuming around 780 Mmcfd gas out of a total 4.3 Billion Cubic Feet per Day (BCFD) production, which is about 1.7 BCFD short against country total managed gas demand.
The gas load-management plan curtails gas supply to the industrial sector in Punjab for four days a week. Gas supply to four fertilisers plants on the system of SNGPL remains suspended since 2011 and the government''s top priority is domestic consumers and power houses, followed by industrial consumers, commercial and CNG.
Currently, the Sui-Northern Gas Pipelines Limited is providing 300 MMCFD of gas to Captive Power plants and 350 MMCFD to other power houses. Sui-Southern Gas Company Limited (SSGC) is supplying around 200 MMCFD gas to power houses of which 135 MMCFD is being supplied to Karachi Electricity Supply Corporation (KESC), Habibullah Coastal power plant Balochistan is receiving 24 Mccfd, Kotri Power Plant 14 Mmcfd and Jamshro Power Plant 20 Mmcfd. SSGC is supplying around 129 MMCFD gas to captive power plants, of which 43 Mmcfd is to textile industry based captive power plants and 86 Mmcfd to captive power general power plants.