ISLAMABAD: Karachi Electric (KE) is reportedly using all available forums including provincial government and trade bodies to get maximum natural gas for power generation, or RLNG at the rate of natural gas.
The power utility has adopted this strategy prior to the visit of its team, including Chairman KE Board, CEO, for meetings with officials in Islamabad on June 8-9, 2022.
Last week, CEO KE met Chief Minister Sindh Murad Ali Shah and briefed him on the power situation in Karachi, receivables from federal government, supply from national grid and issues related to supply of gas for their power plants.
Chief Minister directed Minister for Energy Sindh to contract the federal government for resolution of KE’s issues.
Meanwhile, Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has written a letter to Prime Minister Shehbaz Sharif, a copy of which has also been sent to Minister for Power Khurram Dastgir Khan, stating that it is a matter of grave concern that K-Electric, the sole electricity utility provider for people and industries of Karachi, is being billed at RLNG rate of approximately Rs 4700/ MMBTU for 100 Mmcfd natural gas being supplied to their power plants to produce electricity.
KE was getting 100% natural gas rate at OGRA-approved natural gas tariff till April 2018 and only 60 MMCFD RLNG was added along with 130 MMCFD billed at natural gas tariff.
According to the letter due to the summer the demand of industries and residential consumers has increased and supply from national grid to KE is curtailed and KE is being forced to generate electricity at exorbitant RLNG rates, which is a pass through adjustment and ultimately the consumers will suffer the unaffordable fuel price adjustments.
It is estimated that per Kwh price of electricity will go up to Rs 38 kWh – 41/Kwh if KE is not billed on indigenous gas rate.
Price of indigenous gas approved by OGRA for grid power generation is Rs. 857/MMBTU vs RLNG, Rs 4,700/MMBTU. Karachi’s power demand is being forcibly served through billing KE on expensive RLNG rate resulting in Karachi’s consumers paying additional Rs 13 billion.
In April and May, SSGC supplied 113 MMCFD gas billed at RLNG rate to K-Electric and only 13 MMCFD gas was billed at OGRA approved natural gas rate. In addition to this unacceptable high rate of gas this is in violation of the gas load management policy approved by the Cabinet, which prioritizes public interest and is also against the decisions of CCoE, as well as, Sindh High Court (SHC) that mandated 190 MMCFD provision to KE with 130 MMCFD at indigenous gas rate.
“It is also feared that KE will start load shedding due to non-payment of genuine dues of KE from the federal government, billing of gas at RLNG rate, usage of expensive furnace oil and non-payment of tariff differential subsidy,” sources told this correspondent.
Many SME’s and large business units will no longer be viable at such a high cost of 25 to 30 percent increase in electricity bills.
PAPPAM has demanded that the federal government should immediately direct SSGC to provide KE at least 130 mmcfd of natural gas at the rate of Rs 857 MMBTU already approved by OGRA.
The existing gas being supplied to KE which is 100 mmcfd at RLNG rate should be charged at natural gas tariff as decided by OGRA.
“It is not possible for any consumer, be it a residential or industrial consumer, to bear the Fuel Adjustment Charge burden to the tune of Rs 10 per kWh with already expensive electricity bills,” Chairman PAAPAM Abdul Razzaq Gauhar said, adding that once the bills of June 2022 are raised by KE on higher tariff it will create a hue and cry and probably law and order situation in Karachi.
Copyright Business Recorder, 2022