Gilani steps in, a little too late

After learning that the sudden increase in power outages was the result of non-payment of dues to the Pakistan State Oil (PSO), which has adopted a ‘go-slow’ policy to avoid international default, Prime Minister Yousaf Raza Gilani told the Finance Ministry on Monday to immediately release Rs 9 billion to the state-owned company to ensure full fuel supply to thermal power plants.
An official source told Pakistan Today that the prime minister gave the orders while chairing an inter-ministerial committee meeting, which was convened in emergency to review the acute energy shortfall. The meeting was told that the ministerial committee on energy would be finalising its recommendations on Tuesday.
RECOMMENDATIONS: The major recommendations include two weekly holidays, closure of markets by 8pm and an increase in the power tariff. The special cabinet meeting is expected to be held within a week’s time, the source said. PSO has reportedly decreased fuel supplies to PEPCO for the last few days because of non-payment of its outstanding dues. As a result, the two major independent power producers, KAPCO and HUBCO – which have a combined production capacity of 2500 megawatts – have been generating 500MW for the last few days.
A source told Pakistan Today that Punjab and Sindh had refused to get more water hence the discharge from Mangla and Tarbela has reduced which has resulted in a shortage of hydel power production of 2,500MW. With the payment of dues to HUBCO and KAPCO, 2,000MW will be added to the system. After Gilani’s orders, the Finance Ministry decided that up to Rs 9 billion would be released to PSO on Monday and the remaining amount would be settled after the finalisation of the recommendations of the ministerial committee on Tuesday (today).
PSO is seeking immediate payment of Rs 50 billion to avoid default, the source said, adding that the release of Rs 10 billion would be enough only for a breather.