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Petroleum consumption by the power sector has been primarily due to furnace oil demand by the independent power producers. The share of the oil in power generation has been on an upward trajectory after a short gap when furnace oil based power production was discouraged and planned to be phased out and replaced by coal. However, the rise in demand, fuel shortages, seasonal shortage in hydel, rising commodity prices including coal, gas shortage at home and local refinery dynamics brought oil back into power generation. Share of thermal sources in power generation that include both oil and gas/RLNG continues to remain high and stood at 61 percent for the first 10 months of fiscal year 2022.

The energy sector is dependent mostly on imported fuel be it oil or LNG, which the latest Economic Survey (FY22) shows that became more expensive in FY22 due to higher oil prices in the global market and massive depreciation of the Pakistani rupee. The latest figures in the survey shows that total oil import increased massively both in terms of value and quantity where the petroleum imports were up by 121 percent in value and 24.2 percent in quantity during 10MFY22. Similarly, the import of LNG increased by 39.86 percent during July-April FY22.

The decline in share of natural gas has been due to falling supply of indigenous gas witnessed, which went down by around 5 percent in 10MFY22. This is partially offset by the import of RLNG from two 1200 MMCFD capacity Floating Re-gasification Storage Units (FRSU). The consumption of natural gas in power sector reduced from 610 MMCFD to 560 MMCFD in 9MFY22.

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samir sardana Jun 10, 2022 05:27pm
Use of Oil & Gas for IPP & PPA PPA is for 10 years PLUS There is NO COAL,OIL OR GAS SWAP DONE BY THE IPPs SO THERE IS HUGE FUEL PRICE RISK & FUEL SUPPLY RISK AS U SEE TODAY FUEL PRICE RISK IS A PASS THROUGH - WITHOUT LIMITS IF THERE IS A WAR IN THE GULF OR SOME STRIFE IN SOUTH AFRICA OR CHINA-AUSSIE SKIRMISH & COAL SUPPLY IS STOPPED OR OIL& GAS SHIPPING LINES IN THE GULF ARE BLOCKED - THERE IS A FUEL SUPPLY RISK .IN THAT CASE - WILL PAKISTAN PAY CAPACITY CHARGES TO THE IPPs? EVEN IN FORCE MAJEURE CASES ? THIS IS THE DISASTER OF THERMAL POWER ON TOP OF THAT THESE IPPs HAVE USD TARRIIFS - Y ? ONLY SOLAR,WIND,HYDRO & NUKE POWER HAVE ZERO FUEL SUPPLY RISK & ZERO FUEL PRICE RISK. & THAT IS A HUGE SAVING FOR THE PAKISTAN GRID & INDUSTRY ! THAT IS Y ONLY THESE 4 SECTORS "DESERVE" A USD TARRIFF (WITHOUT ESCALATION - ON THE LOGIC RISE IN IMPORTED COST OF COAL.OIL.GAS & FALL IN PKR))"- BUT THEY "MAY NOT NEED IT{" IF ALL THE COSTS & FINANCING ARE IN PKR .dindooohindoo
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samir sardana Jun 10, 2022 05:59pm
Y IS PAKISTAN STILL NOT MAKING A THRUST INTO RENEWABLES AND NUKE POWER CSP IS 2-5 CENTS AND THERE ARE SEVERAL SITES ALL OVER THE WORLD - TO TEST THE EMPIRICAL DATA AND MAP IT TO PAKISTAN. THERE IS ALSO NO FUNDING ISSUE AS DANIDA/ADB/WB/SDA/OECF/KFW/GTZ GIVE GRANTS AND SOFT LOANS AS THEIR MODULES AND TECHNOLOGY IS SOLD AS FAR AS SPINNING POWER IS CONCERNED PAKISTAN HAS ENOUGH PEAK LOAD POWER (GAS AND OIL AND HYDRO) IS IT THE DISASTER OF CAPACITY CHARGES ? HAS PAKISTAN BEEN TRAPPED BY THE IPPs IN A MANNER TO STATE THAT IF PAKISTAN USES 3-5 CENTS POWER, AND SHUTS DOWN THE OIL AND GAS AND COAL IPPSs - THEN PAKISTAN WILL HAVE TO PAY CAPACITY CHARGES TO THESE IPPs? AND IF THE CAPACITY CHARGES ARE LOADED ONTO THE 3-5 CENTS OF CSP - THEN THE MARGINAL COST WILL BECOME 15-20 CENTS ? IS THAT THE PROBLEM ? HAS PAKISTAN BEEN TRAPPED BY THE IPPs INTO THE CAPACITY CHARGE AND HIGH FUEL COST MATRIX ? ARE IPPs ROTATING CAPACITY CHARGES TO RIP OFF THE STATE ? dindooohindoo
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samir sardana Jun 10, 2022 07:16pm
Y do IPPs in Pakistan get USD Tarriffs ? When Coal,Oil & Gas are imported,per se,for the IPPs or refined in Pakistan from Crude Oil - & the fuel rates are a pass through for FX & CIF rates - then why USD TARRIFFS ? Power tarriff = Variable + Non Variable Costs (NVC) + Profits Why should the Profit of an IPP be indexed to the USD - even if the PKR depreciates, by only 5% per annum ? Let them take PKR tariff escalation from the Grid Why should the NVC be indexed to the USD - when the loans for the IPP are in PKR ? Even if term loans are in USD,IPP should take annual swaps - with prior sanction of GRID - & EVEN THEN THAT SWAP COST should be a pass through - NOT IN A USD TARRIFF ? Why should the NVC funded by EQUITY contribution in PKR - be paid in the form of USD Tariffs ? CAN A GRID ALLOW USD TARIFFS WHEN THE SBP DOES NOT KNOW THE PKR RATE NEXT WEEK ? HOW CAN THE GRID PLANS ITS CASH FLOW & TARIFF CHARTS ? HOW CAN INDUSTRY PLAN EXPANSIONS -IF THE POWER TARIFF IS UNKNOWN ?
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samir sardana Jun 10, 2022 09:08pm
WHAT IS THE PAKISTAN CIRCULAR DEBT IN THE POWER SECTOR ? CIRCULAR DEBT = CAPACITY CHARGES TO IPP + INTEREST COST OF THE CAPACITY COST TO THE GRID & STATE WHAT IS THE CAPA CHARGES PAID TO IPPs IN THE LAST 20 YEARS ? IT WOULD BE IN THE BILLIONS OF USD ADD TO THAT THE ECONOMIC LOSS OF POWER WHICH COULD HAVE BEEN GENERATED THEREFROM - FOR ECO ACTIVITY & EDUCATION & HEALTH CARE.SOME WILL CLAIM THAT THE POWER WAS GENERATED FROM "OTHER SOURCES" - & SO,CAPA CHARGES WERE PAID.THAT IS NONSENSE AS A DEVELOPING NATION "ALWAYS NEEDS POWER" IF CAPA CHARGES ARE PAID - & STILL THERE IS ENOUGH POWER - THAT WOULD MEAN THAT PAKISTAN HAS EXCESS POWER CAPACITY ! Y IS THAT ? & EVEN STRATEGICALLY,WHY PAY CAPA CHARGES ON EXCESS POWER CAPACITY ? IMF & WB TALK ABOUT T & D LOSS & RAISING AGRI POWER TARRIFFS & AGRI TAXES - BUT WHY NOT CUT OUT THE CAPA CHARGES ? Y NOT USE THE IMF CANNON ON CAPA CHARGES & DECLARE FORCE MAJUERE ON CAPA CHARGES & RENEGOTIATE OR EXIT THESE IPPs.
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