Pepco asks government to ensure supply of 27,000 tons per day furnace oil

Pakistan Electric Power Company (defunct) has requested the federal government to ensure uninterrupted supply of 27,000 tons furnace oil daily for its thermal power plants to avoid 'massive load shedding' during winter due to canals' closure, official sources told Business Recorder from Lahore. According to initial estimates, people have to face 6-8 hours load shedding during winter season.
Prime Minister, Syed Yousuf Raza Gilani has recently been briefed about Pepco's financial and administrative issues. Minister for Water and Power, Raja Pervez Ashraf and Secretary Water and Power, briefed the Prime Minister regarding the financial position of Pepco including circular debt, payables to Pepco by provinces, Karachi Electric Supply Company and non-payment of tariff differential by the Ministry of Finance. It was observed that during winter months there will be a sharp decrease in hydel power generation. In particular, hydel generation next month will witness drastic reduction due to closure of canals.
After receiving briefing and listening to the views of the participants, Prime Minister directed the Finance Ministry to immediately sit with the Ministry of Water and Power to finalise financial arrangements for the assured supply of furnace oil to Pepco during January. Prime Minister also directed that financial projections of Pepco may be revisited as gas is not available to improve fuel mix in power sector.
Ministry of Water and Power has been directed to accelerate efforts for recovery of Pepco dues payable by provinces, Federally Administrated Tribal Areas (FATA) and KESC. Minister for Water and Power will also raise the issue of dues with President Asif Ali Zardari because of his influence in Sindh. Ministry of Water and Power has been directed to consider partnership with the provincial governments by giving them representation on the Board of Directors (BoDs) of Discos.
Meanwhile, Pakistan State Oil (PSO) has drawn the attention of Pakistan Railways towards insufficient availability of tank wagons since June 2010 resulting in less than committed supplies to power sector consumers. As per Railways commitment of providing maximum availability of tank wagons, PSO has made commitment with Wapda/ IPPs for fulfilling their demand. However, Railways has failed to provide required number of tank wagons.
Historically, on average approximately 120,000 tons per month furnace oil is moved through Railways, however, since June 10, furnace oil supplies to power sector customers have declined considerably owning to non availability of tank wagons. "This has hampered our movement and resulted in sharp decline in stocks at our customers' location which is detrimental in view of the prevailing energy crisis in the country," sources further revealed. PSO has urged Ministry of Railways to confirm allocation of wagons for PSO from January 2011 onwards so that the entity can supply required quantity of furnace oil to the power sector in winter.