ANL 10.28 Decreased By ▼ -0.05 (-0.48%)
ASC 9.09 Increased By ▲ 0.02 (0.22%)
ASL 10.99 Decreased By ▼ -0.21 (-1.88%)
AVN 77.60 Decreased By ▼ -0.78 (-1%)
BOP 5.40 Decreased By ▼ -0.03 (-0.55%)
CNERGY 5.33 Decreased By ▼ -0.04 (-0.74%)
FFL 6.60 Decreased By ▼ -0.03 (-0.45%)
FNEL 5.85 Decreased By ▼ -0.10 (-1.68%)
GGGL 11.09 Increased By ▲ 0.03 (0.27%)
GGL 16.53 No Change ▼ 0.00 (0%)
GTECH 8.41 No Change ▼ 0.00 (0%)
HUMNL 7.14 Decreased By ▼ -0.02 (-0.28%)
KEL 3.00 Decreased By ▼ -0.09 (-2.91%)
KOSM 3.21 Increased By ▲ 0.17 (5.59%)
MLCF 27.00 No Change ▼ 0.00 (0%)
PACE 3.00 No Change ▼ 0.00 (0%)
PIBTL 5.94 Decreased By ▼ -0.13 (-2.14%)
PRL 17.90 Decreased By ▼ -0.30 (-1.65%)
PTC 6.97 Decreased By ▼ -0.05 (-0.71%)
SILK 1.17 Increased By ▲ 0.01 (0.86%)
SNGP 34.28 Decreased By ▼ -0.13 (-0.38%)
TELE 10.81 Decreased By ▼ -0.22 (-1.99%)
TPL 9.08 Increased By ▲ 0.03 (0.33%)
TPLP 20.15 Increased By ▲ 0.11 (0.55%)
TREET 29.15 Decreased By ▼ -0.35 (-1.19%)
TRG 77.11 Increased By ▲ 0.06 (0.08%)
UNITY 20.05 Decreased By ▼ -0.19 (-0.94%)
WAVES 12.80 Increased By ▲ 0.10 (0.79%)
WTL 1.33 Decreased By ▼ -0.04 (-2.92%)
YOUW 4.99 Increased By ▲ 0.19 (3.96%)
BR100 4,101 Increased By 22 (0.54%)
BR30 15,026 Decreased By -95.4 (-0.63%)
KSE100 41,541 Increased By 243.1 (0.59%)
KSE30 15,805 Increased By 108.4 (0.69%)

EDITORIAL: When it rains, it pours. On top of all its troubles the government is also going to take plenty of heat because of the likelihood of power load-shedding during the holy month of Ramazan, as revealed in an exclusive report in this newspaper, due to shortage of furnace oil and RLNG. “RLNG-fired plants… are being supplied 460 MMCFD RLNG against demand of over 700 MMCFD, while the furnace oil position is also unsatisfactory,” it was reported.

And the reason is non-availability of adequate funds to IPPs (Independent Power Producers). Ordinarily, they are contractually bound to keep two-week fuel buffer stocks but renege on this commitment when the government fails to clear due payments, also as per their contracts, because then they are unable to buy the required quantity in advance; as in this case.

That explains reports of unscheduled load-shedding up and down the country even though summer hasn’t yet properly begun. And officials have started confirming to the press that unless this situation is dealt with immediately, it is not going to be possible to ensure uninterrupted power supply during Ramazan.

It’s already led to a law-and-order situation in Chitral, which is experiencing anywhere between 12-to 22-hour-long blackouts at a time, and there have been reports of protests in Peshawar as well. Still, true to script, the government simply refuses to acknowledge that there is any unscheduled load-shedding anywhere in the country. “No unscheduled load-shedding… Revenue-based load-shedding only,” Energy Minister Hammad Azhar told this newspaper, in clear defiance of on ground facts.

It’s also been reported that the Central Power Purchasing Agency-Guaranteed (CPPA-G) recently communicated to the government that it was facing serious financial problems due to low recovery from power distribution companies (Discos), and requested the ECC (Economic Coordination Committee) to approve Rs150 billion to clear overdue payments of coal-fired power plants, mostly owned by Chinese companies. But the finance ministry refused to entertain the request, citing a financial crunch of its own, and only Rs50 billion was approved.

It doesn’t seem like this problem can be solved in time for the government to save face during the holy month, unless it is willing to take the kind of financial pressure that it rejected only recently. But it’s not just about how the government is going to look over the next one month. It’s also about productivity and an unwarranted hit to the economy.

If things are this bad when the season is just starting, surely, they will get much worse as both the mercury and demand increase, and force more power cuts in what is already being projected as the hottest summer on record. Hopefully, the government is not counting on brushing this issue under the carpet as well by continuing to blame previous administrations or, worse, some international conspiracy just to make it look bad.

This issue could not have erupted at a worse time. Truth be told, the government presently finds itself in all sorts of troubles precisely because of what is seen as its mishandling of the economy and its refusal to take any sort of responsibility whatsoever.

If only prices weren’t so high, or employment and growth only slightly better, the opposition would not have been able to whip up the ‘no-confidence’ storm and all the confusion that has come with it. Already, international agencies, starting with Moody’s, are warning of a hit to the country’s fragile credit rating because of all the confusion it, and the ruling party’s response to it, has caused. And nobody ought to need any reminding that nothing spooks financial markets quite like uncertainty about the immediate future.

The economy is already pretty much on its knees. Reserves are depleting, the IMF (International Monetary Fund) bailout programme is frozen again, and now there’s a power crunch, not quite unexpected, to limit growth even further. If these issues are not addressed, looking bad in Ramazan might become the least of the government’s problems.

Copyright Business Recorder, 2022


Comments are closed.