Increasing power supply gap Govt to take up issue on Zardari’s return from US
LAHORE, May 23: The government is expected to make a decision on tackling the issue of increasing electricity supply gap on President Asif Zardari’s return home from the United States.
Officials told Dawn on Wednesday the president and the prime minister would jointly chair a meeting of president’s committee on energy consisting of ministers — finance minister Dr Hafeez Sheikh, water and power minister Naveed Qamar and petroleum minister Asim Hussain — and prominent business leader and chairman of prime minister’s task force on energy Gohar Ejaz. The committee has already held three meetings and the next meeting will also be attended by information minister Qamaruz Zaman Kaira and Kashmir affairs minister Manzoor Wattoo, who were included by the prime minister in the cabinet committee on energy (with finance and water and power ministers being the other members).
“There are several proposals (for tackling growing, long power cuts) on the table. The meeting will discuss these solutions and take a decision as to how implement one or a combination of suggested solutions to reduce electricity supply gaps for consumers,” an official said. He said the decision would be taken before the announcement of the next budget on June 1 so that the government could make the required financial provisions in it.The proposals being considered by the government and discussed at length at committee’s previous meeting presided over by the president include allocation of financial resources in the budget for timely payment of tariff differential (or power subsidy) to Pepco to ensure uninterrupted supply of fuel to power producers, prevent piling up of circular debt and improve efficiency of Discos (that is, reduce power theft and line losses and increase collection of bills).
The official said the participants of the meeting last week expressed their dissatisfaction with the performance of the Pakistan Electric Power Company (Pepco) and called for revamping it for improving its efficiency by controlling its losses and increasing collection.
There exists strong support for transferring price to consumers and recovery of bills in order to create resources for unhindered supply to consumers. One proposal on the table calls for implementation of equivalence surcharge on all gas consumers — power producers, industry, fertiliser manufacturers and CNG stations — barring domestic users to raise its price to generate revenue of around Rs300 billion a year. It will allow the government to reduce the electricity tariff by more than Rs3 a unit to bring the prices of both electricity and gas on a par with each other.
Yet another proposal, according to the official, pertained to phasing out use of gas for transport by raising its price to the level of petrol. “The supporters of this proposal believe that it will allow the government to divert the 500mmcfd gas used to fill car tanks to the power sector (200mmcfd), fertiliser (100mmcfd) and industry (200mmcfd). By diverting more gas to power plants will help save the government at least Rs200 billion on imported oil being used to produce electricity. Another Rs100 billion will be saved on subsidy given to farmers on imported urea by ensuring operation of domestic fertiliser industry to its full capacity. Further, the provision of gas to the export-oriented industry will help revive idle capacity of $4 billion,” he said. The supporters of the proposal, he said, argued that this would ultimately liquidate circular debt, help cut electricity tariff and improve exports.
The government is estimated to have lost Rs390 billion in the first 10 months of the current financial year because of tariff price differential of Rs300 billion and line losses and power theft of Rs90 billion. Currently, it is recovering an average price of Rs7.85 a unit from consumers against its cost of over Rs12 a unit.