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Print

Chinese energy company threatens to discontinue import of Afghan coal

Gives NEPRA one week to approve pricing mechanism
Published July 10, 2022 Updated July 11, 2022
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ISLAMABAD: Chinese company M/s Huaneng Shandong Ruyi (Pakistan) (HSR) Energy (Private) Limited has threatened to discontinue import of Afghan coal if Nepra does not approve agreed pricing mechanism within one week.

This message has been conveyed by the company’s Chief Executive Officer (CEO) Dr Li Xin in a letter to Registrar National Electric Power Regulatory Authority (Nepra).

According to the Chinese company, it has always considered it a responsibility to ensure that the people of Pakistan are provided cheap and continuous electricity. However, the recent turn of events internationally has led to immense increase in international fuel cost which coupled with ever increasing USD against PKR has doubled the impact of increase in fuel on the power tariff in Pakistan.

He maintained that keeping the aim of reduction in fuel prices and lowering the import bill so that foreign currency is saved, in sight the Company was asked to explore cheaper (compared to the existing coal price) qualified fuel alternatives with payments being made in PKR.

Afghanistan raises coal prices as exports to neighbouring Pakistan boom

Although the Company had been working on Afghanistan coal it was asked to speed up the operational process and thus a meeting was held in Nepra, in presence of CPPA-G, on June 27, 2022 whereby a fuel price mechanism was to be decided. In the meeting it was principally agreed that the Afghan coal price should be cheaper than that of South African coal and the payment is made in PKR. Another thing that was decided in the meeting was that since the power supply needs to be ensured on a priority basis, thus, initially only top 12 importers as per FBR will be contacted so that the bidding can be completed on urgent basis.

Moreover, it was also agreed that for the next month, i.e., August 2022, a public bidding will be conducted.

CEO HSR has informed that a call to all 12 importers was made to ensure that the response was received on urgent basis. Out of these 12, only 7 suppliers picked up the call. Out of these 7 suppliers 6 were willing to bid, and hence bidding documents were emailed to all these six suppliers. However, response from bidding was received from only 4 suppliers. Upon reviewing these bidding documents, two suppliers were shorted listed as per the bidding result.

The Company has ensured that in time of need it would fulfil its responsibility and ensure cheap and continuous electricity supply and uphold the transparency of the process. However, the Company despite acting in the best interest of the country cannot bear a loss.

Thus through the letter HSR has requested Nepra to approve, including but not limited to the mechanism (including loss rate) the price for Afghanistan coal.

The Company is under serious financial crisis and it is in no position to bear any deduction in its fuel price, he said, adding that if the agreed mechanism is not approved by Nepra within one week, the Company would have no option but to stop import of Afghan coal and rely only on South African coal.

Comments

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Razi Jul 10, 2022 02:37pm
I hope Nepra disallows Afghan coal. What are we going to do with 185 Billion coal resources of Pakistan. Lets use these coal resources then import.
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seifu Jul 10, 2022 11:30pm
we have coal .ready for development .according to geological survey our coal land has 70 million metric tons.our company is looking a partnership can developed to export .for further information Please contract us.we can provide any information . Best regard
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Leo Jul 11, 2022 03:07pm
@undefined connec me
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Leo Jul 11, 2022 03:15pm
@seifu, connect me
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ZaKaUllah Jul 11, 2022 06:59pm
Pakistan should take counter measure by raising prices in exports and stop their aid. You cannot believe on Afhans.
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Zarwar king Jul 11, 2022 10:10pm
I'd like to leave a message here
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Aslam Jul 12, 2022 06:33am
Our land is full of oil and gas . Balochistan , Sindh , Punjab . And last survey in murree also found gas . Oil was found on the roads of a famous shopping mall in islamabad in 2004/6. Than why we are importing the oil .?
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Suleman Javed Jul 12, 2022 07:47am
@Razi, plants run on high grade coal with a combination of low grade coal. The coal u mentioned is of low grade. The plant won't work if we fueled it with 100 percent local coal. In order to run on local coal plant requires modification. We. Have to look into contract whether such modifications are allowed or not. thanks to pml N for providing such plants that cost us billions of dollars till now.
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azam Jul 12, 2022 02:01pm
@ZaKaUllah, so are u sure that Pakistan is a reliable country.....a country of dishonest people...go see your image at international level
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Gh hazrat Jul 12, 2022 08:51pm
I’m a importer of afghan coal but good quality with a high GCV and low sulphuric direct from mine without any mixing how ever we are having a lot of problems in transporting and importing but in ready to discuss with nesar chines power plant about pure afghan coal on right basis my phone no 03003866155
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Gh hazrat Jul 12, 2022 08:54pm
Better to contact me by my cell phone
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Riaz Soomro Jul 12, 2022 09:01pm
Afghan coal supply for power plants may be reviewed, inconsistency in supply will lead to capacity payments. It's mine capacity, extracting process are question marks. Uphill now afghan coal is catering cement industry located in northern side, taking benefit of distance. On the other hand Thar coal is available in abundance, can cater the need of power plants
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Wahidkhan Jul 12, 2022 11:35pm
Afghan govt would imported the coal with makes friendship
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F. K. Jul 13, 2022 06:43pm
Stolen coal. In this situation you steal coal of afghanistan. You are indeed a country that was founded by british. A menace for india and afghanistan for eternity. I would feel ashamed as a pakistani
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