Loadshedding - round 2 - fight

The ongoing power crisis took an expected ugly turn when the masses decided to take matters in their own hands. It was only inevitable, especially in Punjab, that something of this sort would ultimately happen, and it did, leaving a sour taste and bringing the government back to the table for yet another energy crisis management meeting. It is highly likely that the government will again press the panic button and direct the finance ministry to dole out funds immediately to improve the fuel supply situation. The fresh face in the power ministry, Ahmed Mukhtar, has vowed to reduce load shedding in three months. But as it stands, it will only be a result of reduced demand after the peak summer season instead of the much-needed reforms. The circular debt has continued to grow in all directions and stands at nearly Rs.400 billion, that is why power producers are finding it difficult to procure furnace oil or gas (see table). The inability of distribution companies to speed up their collection mechanism has contributed heavily towards defaults. A sizeable portion of the state-owned power machinery continues to be highly inefficient as experts term the state-run power plants as fuel-guzzlers. Arranging funds for the restoration of fuel supply to power plants have not worked in the past and will not work in the future as it has time and again proved to be a short-time breather and the problem resurrects in a couple of months. News reports suggest that the government is considering revisiting the gas allocation policy 2005 by placing the power sector a ladder higher than its existing third position on the priority list. Fertiliser firms have already been issued notices of gas supply closure until the situation improves, which is likely to result in more urea imports and an inflated import bill. Should the power sector get the promised 200mmcfd gas, it would help reduce load shedding from the current levels. But the brunt of gas curtailment should not entirely fall upon the industries, especially the ones who are entirely dependent on gas as their raw material, as it carries grave consequences for the industrial output. Power stations connected to the grid should get gas on priority above the captive power plants as per the contractual obligations. Moreover, usage in the transportation sector needs to be checked as it can free up to 300mmcfd gas for the power sector. The rest of the deficit could be plugged by curtailing industrial gas on rotational basis. That said, none of these are solutions; these are just short-term plugs. There is a dire need to expedite the gas import process in the form of LNG, rationalising the gas price across the board to discourage the abuse in domestic and transport sectors, improving efficiencies in the base load power plants and fastening the billing recovery mechanism at the discos. Without these, protests will continue on the streets and the finance ministry will keep doling out money to the ailing sector.