Four key ministries of the government dealing with the energy crisis have failed to come up with a viable solution to solve the electricity and gas load shedding, as bickering continues among them on the gas supply, timely payment of subsidies and hike in power and gas tariffs.
According to an official source, a committee consisting of officials of the ministries of Finance, Petroleum, Power and Planning Commission has failed to find a solution for timely payment of the tariff differential subsidy which is the key reason for the rise in circular debt, non-payment of fuel supplies and the prolonged of the energy crisis.
“The committee was mandated to give its recommendation by the end of the last fiscal year.” Despite the claims of the government that the distribution companies (DISCOs) were completely autonomous, the situation remains bleak as the Ministry of Water and Power still interferes in their administrative matters while their financial matters are controlled by the Ministry of Finance.
The matters become worse when the tariff determined by the regulator is tampered with by the government and it delays paying the subsidy. It is important to mention that the tariff determined by the National Electric Power Regulatory Authority (NEPRA) is often altered by the government before implementation. The difference between the actual cost of energy and the domestic charge ends up as a direct subsidy to the DISCOs.
This favour makes the DISCOs continue with their inefficient practices. Most of these payments end up as PEPCO receivables, which in turn reduces payments to the independent power producers and to Pakistan State Oil for fuel supplies. “Too much involvement of the government to resolve the issue further complicates the issue,” he added.
He said the government has denied implementing the differential tariff mechanism for the distribution companies, DISCOs, as the public sector entities outside Punjab have line losses of above 30 percent.
To avoid political backlash in the smaller provinces, the government continues with the uniform tariff principle. Implementing the differential tariff would allow profitable DISCOs to buy more power for the consumers in their jurisdictions. In the last three years, Pakistan’s installed electricity generation capacity has risen from 18,000MW to over 21,000MW on June 30. The demand has also risen from 15,000MW to 18,000MW.
However, the generation remains limited between 13,000MW and 14,000MW. Since the government has no money to pay for fuel supplies to independent power producers (IPPs), the available capacity could not be added to the national grid. According to the source, a total of 3500MW electricity was out of the system due to the fuel shortages. The Kot Addu Power Company (KAPCO), one of the largest IPP in the country’s unit no 3 and 4 having 252MW capacity, was closed due to the non availability of gas, while its unit no 2, 5,6,7 and 8 having 620MW capacity were not operational due to shortage of fuel.
Similarly, 62MW SEPCOL, 126MW Saba Power, 59MW Japan power, 140MW HUBCO Narowal, 209MW Halmore were non functional due to fuel supply shortages. The 209MW Karkey and 60MW Techno rental power plants are not in use due to shortage of fuel. There is a dismal picture on the public sector generation companies GENCOs, Jamshoro unit 3 of 170 MW capacity is out of order due to boiler tube leakage, 140MW Kotri complex due to non availability of gas, 150MW Guddu unit 3 leakage in feed water line, 70 MW Guddu unit 5 rotor problem, 107 MW Guddu unit 6 and 10 generator lockout, 245 MW Muzaffargarh unit 4 ID fan vibration, 170 MW Muzaffargarh unit 5 loss of logic power, and 170 MW Muzaffargarh unit 6 loss of excitation.
The Ministry of Water and Power has numerous times requested the Petroleum Ministry to enhance gas allocation for the power sector. However, it still gives top priority to the domestic, commercial, industrial and fertiliser sectors. He said the government desired reprioritisation for gas allocation but no committee was formed or the purpose.