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Pakistan circular debt showing steep rise

Date:

ISLAMABAD: With gas shortfall estimated to peak closer to one billion cubic feet per day in January, the ministry of energy on Thursday reported the power sector circular debt at Rs2.419 trillion at the end of October, rising at the rate of about Rs35 billion per month.

This was the crux of a meeting of the Cabinet Committee on Energy (CCoE) presided over by Minister for Planning, Development, and Special Initiatives Asad Umar.

An official statement said the petroleum division of the energy ministry presented projected natural gas supply and different policy options for the management of gas supply from the management side for the winter months — December 2021 through March 2022.

The meeting was informed about the efforts to enhance the natural gas supply. The CCoE directed the petroleum division to ensure maximum supply while ensuring implementation of a demand management plan as already approved by the Cabinet.

Non-export general industry to be provided gas on the basis of weekly rotation

After analysis of demand and supply situation, including domestic gas production and LNG imports, the overall gas shortage in December was estimated at about 720 million cubic feet per day peaking to 970mmcfd in January and the coming down to 640mmcfd in February. To overcome the shortfall in energy supply chain, particularly in the power sector, the furnace oil requirement was estimated about 170,000 tonnes in December, 150,000 tonnes in January and about 55,000 tonnes in February. The meeting was informed that furnace oil availability in December would be around 140,000 tonnes and 90,000 tonnes in January and over 130,000 tonnes in February. That meant some power shortages could also be expected depending on demand growth as a result of cheaper seasonal and industrial support tariff.

It was decided that gas and RLNG would be supplied uninterrupted to export industry, including top 50 exporters, in addition to zero-rated industry, unless technical constraints emerge in the system like pressure problems. Supply of gas and RLNG to export-oriented captive power plants would be monitored till December 15 and then re-adjusted based on availability. CNG would remain closed until February 15.

The general industry (non-export) would be provided gas on the basis of weekly rotation, with one-day off, for each sector or zone. The cement sector would be treated on par with non-export general industry and complete closure would depend on supply review. Uninterrupted gas supply of about 757mmcfd would continue to the fertiliser sector to boost agriculture productivity. Fauji Fertiliser and Fauji bin Qasim would get 330mmcfd, Engro 203mmcfd, Fatima 147mmcfd, Pakarab 49mmcfd and Agritech 29mmcfd.

The power sector IPPs on dedicated arrangements worth 3,000mw would get uninterrupted gas supply but then these are based on non-pipeline quality gas which could not be transported. LNG-based power plants would be provided 5 per cent extra supply as compared to last year’s actual consumption.

It was decided that after meeting national requirements of gas for critical industries, “maximum efforts would be made to accommodate the domestic consumers on priority” and in case of extreme winter, gas curtailed from CNG, cement, general industry (non export) and captive plants of export industry would be diverted to domestic sector to ease political noise.

For space and water heating, the domestic consumers were being encouraged to fully utilise the seasonal electricity tariff of Rs12.96 per unit. Also, electricity package for export industry at the rate of 9 cents per unit had already been provided while gas tariff for export sector (captive plants) has been increased from $6.5 per million British Thermal Unit (MMBTU) to $9 to switch industry from gas to power grid.

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