ISLAMABAD, April 24: The inevitable has happened and a severe energy crisis involving shortages of oil, gas and electricity has hit the nation as authorities struggle to resolve the chronic circular debt problem.

According to officials, electricity shortfall has exceeded 6,000MW, resulting in more than 12 hours of countrywide loadshedding while stocks of petroleum products are drying out in parts of Punjab, Azad Kashmir and Gilgit-Baltistan.

And officials are apprehending closure of oil and gas producing fields mainly because of a decision by the refining sector to reduce oil and gas offtake from the largest producer, the state-run Oil and Gas Development Company Limited (OGDCL).

“Refineries have reduced overall throughput and have refused to uplift local crude. This is snowballing into a big crisis,” said a senior official.

The power sector consumes around 700,000 tons of furnace oil a month, about 400,000 tons of this comes from imports. The refineries’ reluctance to uplift domestic crude could affect fuel supplies of about 300,000 tons, almost half of the power sector’s requirement.

That could aggravate the electricity shortfall because of an expected drop in oil and gas production and subsequent curtailed supplies for power generation. The closure of producing fields could cause damage to petroleum installations, the officials said.

“The situation is very severe and is going to cripple the economy,” one official said.

“Ministries of finance and water and power should take the matter seriously and reverse the situation,” the official said, adding that the petroleum ministry had appealed to the finance ministry to release at least Rs70 billion immediately to bring the situation under control.

Another official told Dawn that the ministries of petroleum and natural resources and finance remained engaged with oil refineries on Sunday to persuade them to return to full production, restore supplies to PSO and postpone their decision to further reduce their output.

Gauging the severity of the crisis, an appeal for immediate intervention was made to President Asif Ali Zardari on Sunday evening. He has called an emergency meeting of all stakeholders – ministries of finance, water and power and petroleum, heads of public sector oil, gas and power companies, refining industry and oil marketing companies on Monday to rectify the situation.

Officials said that receivables of the largest fuel supplier — the Pakistan State Oil — crossed Rs185 billion on Sunday as power companies failed to make payments. Its payables, mainly to refineries, also surpassed Rs120 billion.

The receivables of the largest gas producer — OGDCL — crossed Rs150 billion on Sunday. Because of non-payment, National Refinery, Byco and Attock Refinery have stopped supplies to PSO while Parco and Pakistan Refinery are providing partial supplies. On top of that, Attock Refinery has been issuing notices to cut 10,000 barrels of domestic crude oil offtake from OGDCL, which normally provides about 42,000 barrels to ARL. As a consequence, PSO has slowed down fuel supplies to Wapda and independent power producers.

The problem is that ARL is the major supplier of almost all petroleum products for most of the northern areas. Officials fear that gas production from Chanda, Mela and Nashpa fields could also stop as ARL curtails offtake from OGDCL and cause an additional gas shortfall of about 50 mmcfd. He said the production from Gurgury and Makori fields in Khyber Pakhtunkhwa could also be affected. Since these fields are operated by Hungarian MOL their production may continue for some time.

Officials said the country still had 22 days coverage of furnace oil requirement, 22 days of diesel and 12 days of petrol but most of these stocks were in the southern areas — Karachi to Multan — and hence these could not be immediately moved to the northern region normally fed by ARL.