Finance ministry to release Rs22b for furnace oil to avoid winter outages

Nov 29, 2013| Courtesy by :

ISLAMABAD  – Finance Ministry is all set to release Rs 22 billion to arrange furnace oil for more thermal power generation in next three months to ensure electricity supply; otherwise country might experience huge power outages in December, January and February mainly because of negligible hydropower generation.

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“The Finance Ministry has sanctioned Rs 22 billion for power sector, which will be released in next one or two days”, said Rana Asad Amin, adviser and official spokesperson of the Finance Ministry while talking to The Nation on Thursday. He further informed that total power subsidy would reach to Rs 102 billion following the release of Rs 22 billion during the period (July to November) of the current fiscal year 2013-14.
The Ministry of Water and Power has earlier asked the Finance Ministry to immediately release Rs 25 billion to arrange the furnace oil for more thermal power generation for the said three months to maintain loadshedding only for eight hours, otherwise the outages will be hovering at 16-20 hours. “Expected power outages will reduce to eight hours following the release of Rs 22 billion from the finance ministry”, sources in ministry of water and power said. He further said that otherwise Pakistan is going to experience huge power outages in December, January and February mainly because of negligible hydro power generation following canal closures and reduced outflow of water from dams plus zero supply of gas to power generation plants.
He further informed that country is heavily relying on costly thermal power generation, as thermal power generation stands at almost close to 70 percent whereas the country’s capacity on producing hydro generation has 25 percent.  Owing to so far estimated reduced hydel power production and proposed natural gas supply suspension plan of petroleum and natural resources ministry, the government has now devised a new plan under which reliance on thermal power production would be increased to meet the expected increased power shortfall.
Following a decision of all provincial governments to launch annual canal closure from December and a ready schedule of Indus River System Authority (IRSA) about water release from both Mangla and Terbela dams, it is feared that power shortfall in December and January would go above 4,000MW in the country due to reduced hydel power production and also because of a proposed three-month long gas supply suspension plan of the Ministry of Petroleum and Natural Resources, they added.
Sources said that government might increased the power sector subsidy to Rs 250 billion from the budgeted amount of Rs 220 billion for the current fiscal year due to failure in implementing reforms like tariff rationalisation from October, 1 2013. The government had budgeted Rs 220 billion as power sector subsidy for the current fiscal year, which included: (i) Rs 150 billion to Pepco on account of inter-disco tariff differential, (ii) Rs 3 billion tariff differential for agri tubewells in Balochistan, (iii) Rs 12 billion for payment of electricity receivables from Fata, (iv) Rs 100 million on account of exchange rate differential for USAID grants to generation companies, and (v) Rs 55 billion subsidy to KESC.