The woes of the crises-hit people of Karachi multiply every time prices of Petroleum, Oil and Lubricants are increased in the country.
The skyrocketing price of furnace oil, which has undergone an increase of over 115 percent since July 2009, has adversely affected millions of poverty-hit consumers of electricity.
Besides a shortage of gas, the price of furnace oil in July 2009 stood at approximately Rs 38,000 per tonne – inclusive of general sales tax – and it swelled to an unprecedented price of Rs 82,000 per tonne as of January 2012, Karachi Electric Supply Company (KESC) sources said.
This means that the cost of a primary input has increased by a whopping 115 percent in merely two and a half years.
Expressing serious concerns over the recent notification issued by the state-owned Pakistan State Oil for yet another increase in the price of furnace oil, sources said the continuously increasing price was more worrisome in the wake of the prevailing gas shortage, especially for power generation, forcing an unfortunate incremental reliance on 3.7 times more expensive fuel, which would definitely have a further adverse impact on the power tariff for consumers.
Moreover, added the sources, due to the ever-decreasing supply of natural gas to the KESC, furnace oil consumption, which in the fiscal year 2009-10 was Rs 26 billion (576,486 tonnes), increased by about 102 percent to Rs 52.6 billion (910,548 tonnes) in the fiscal year 2010-11.
It is important to note here the fact that customer tariff is a direct function of the fuel mix that is used to generate electricity, and with the incremental reliance on furnace oil due to inadequate gas provision stated above, the adverse impact is affecting not only the KESC, but also the power consumers in terms of fuel surcharge adjustment passed onto them via the tariff determined by the National Electric Power Regulatory Authority.
To avoid further jump in electricity tariff, supply of the required quantity of natural gas to generate power is needed, besides minimising consumption of costlier fuel.
In the interest of the public, the government needs to intervene and consider rationalising the input costs for power generation, the unchecked spiralling of which is turning electricity into a luxury rather than a necessity.
