By Staff Reporter
ISLAMABAD: Cash-strapped Pakistan had to fork out almost a billion dollars to energy procurement to keep Prime Minister Shehbaz Sharif’s promise of zero-load-shedding by 1 May 2022, Independent Pakistan can report.
The government procured six cargos of pricey Furnace Oil (FO) and five cargos of RLNG to bring back online some of the thermal capacity offline because of fuel shortage. The aggregate cost of these spot market purchases came to approximately $900 million.
These contingency measures have pushed the cost of thermal electricity to the vicinity of Rs30-35 per unit – scarcely affordable for a country running short of foreign exchange. Pakistan’s forex reserves nosedived to $10.5 billion in the last week of April 2022, recording a $6-billion outflow in seven weeks.
A couple of weeks back, Federal Minister for Finance Miftah Ismail promised no further depletion of forex reserves below the then reported level of $10.8 billion. Apparently, however, the slide continued, bleeding another $350 million in the ensuing time, to touch $10.5 billion last week.
Overall, the coalition government managed comparatively economical additional generation of 450 megawatts electricity including 180 MW through the test run of Karrot Power plant. The remainder came from a boost in hydel generation through optimisation of Mangla and Terbela, helped by increased water flow because of the heatwave.
However, Federal Minister for Power Khurram Dastgir Khan claimed that his ministry added 2,530 MW through thermal power plants, hydel power plants, coal, and RLNG to ensure zero load shedding in categories A, B, and C grid stations. Some residual load shedding continues on loss-making grids but there are no outages in other areas across the country, Khan added.
The woes of Pakistan’s power sector stem largely from circular debt that has continued rising unabated, reaching Rs2.5 trillion at the twilight of Pakistan Tehreek-e-Insaf (PTI) government. The figure hovered around Rs1.1 trillion when it took over from Pakistan Muslim League – Nawaz (PML-N) government.
The circular debt in turn stems from federating units failing to pay their power bills in a timely fashion. AJK and Balochistan governments are dragging feet over billions of rupees in overdue electricity bills. Outstanding power bills of Balochistan’s tube wells alone have surged to over PKR 400 billion.
The Sharif government will have to take tough decisions to deal with the problem. Deducting these dues at source from federal disbursements to delinquent units looks like the only viable option at the moment.
Such a strategy, however, will require firm commitment and political will, without which the monster circular debt will continue to balloon, threatening to choke the whole power system of the country.
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