Outstanding circular debt, supply of oil, gas etc: loadshedding to continue till issues resolved

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ISLAMABAD :Load-shedding in the country will continue till the issues of outstanding circular debt, supply of oil and gas, projects in pipeline, inefficiency, and theft are not resolved and overall economic outlook was not changed. According to sources, one reason of circular debt is non-payment by the provincial governments and Azad Jammu and Kashmir, over billing and non-collection of the bills, especially in case of Hesco, Pesco and Qesco and disallowed expenditure by the regulator.

The sources said that the current circular debt stands at Rs 150 billion while the system is still clogged. They said that the average collection by Pepco entities on Re 1 billed is 80 paisa. They said that no organisation can sustain such haemorrhage and this situation cannot go on unhindered.

According to documents available with Business Recorder, although capacity has increased by over 2000MW, and another 1200MW still on way, the additions are substantially insufficient to meet country wide peak demand of 22000MW this year. The demands of the electricity can be fulfilled if the supply of oil and gas be made to power plants in accordance with their requirements.

The source said that currently installed fuel oil based plants require 36,000 tons/day whereas the total port capacity is around 25,000 tons at the maximum and another 4000 tons/day fuel oil is produced locally. In fact the full 25,000 tons/day is not imported due to circular debt.

The sources said that there are no significant up-coming projects in the private sector. The projects in the public sector are being mishandled due to the inefficiency and corruption. The sources said that the current average price is about Rs 1. 65/Kwh less than the average Nepra determined price of Rs 9. 56/Kwh. This determination includes 10 percent of line losses, which can be directly attributed to theft and inefficiency of the organisation.

About exploration, the documents say that against a target of 100 wells only 27 wells have been spud this year with only 7 exploration and 20 development wells. There has been no major discovery in the last 5 years and discovered reserves have been steadily falling.

Courtesy: Business Recorder


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