ISLAMABAD: Prime Minister, Shehbaz Sharif has constituted a five-member committee to review performance of power Distribution Companies (Discos) besides supply of electricity and gas in upcoming season, official sources told Business Recorder.
Headed by former Prime Minister, Shahid Khaqan Abbasi, the panel will comprise of Minister of State for Petroleum and Natural Resources, Dr Musaddiq Malik, Prime Minister’s Coordinator on Economy and Energy, Bilal Kayani, Former Managing Director/ CEO at Pakistan LNG Ltd, Adnan Gilani and Secretary Power and deliberate current issues of both power and gas sectors and suggest measures to improve their performance and future strategy.
The Terms of Reference (ToRs) of the Committee shall be as follows: (i) review and suggest improvement in the performance of Discos, including issues of theft and non-recovery of electricity dues;(ii) review and suggest a plan for power generation (demand, supply and price) including generation capacity and fuel availability for summer 2023;(iii) review and suggest a plan for availability of gas (demand, supply and price) including local gas, RLNG and LPG for winter 2022; and (iv) any other related issue(s) which require consideration of the committee.
The committee, which has been directed to submit its report within 30 days, may co-opt any other member(s)/ expert(s) as per requirement.
International Monetary Fund (IMF), in its seventh and eighth review of extended arrangement under the Extended Fund Facility urged the authorities to improve DISCO’s governance and accountability, introduce private participation, and progress with a phased privatisation, introduce competition, and implement the recently approved National Electricity Policy 2021.
The Fund also advised the authorities to fix quarterly quantitative targets for each DISCO for technical and distribution losses, collection from current consumers and recoveries of arrears.
The authorities have agreed to only gradually absorb maturing publicly-guaranteed PHPL debt into cheaper central government debt if fiscal space allows and use proceeds to reduce the CD stock (including privatization proceeds from power sector assets and recoveries from the outstanding stock of receivables).
The sources said gas reserves are depleting at the rate of 9 per cent per annum.
In absence of any major discoveries in the coming years, the gas reserves would be fully depleted in future due to low rate of replenishment.
In 2021, the Federal Cabinet had directed Petroleum Division to prepare short, medium and long-term plans to face the looming challenge of depleting gas reserves and re-check to ascertain gas reserves depletion rate so as to determine how much of it was due to theft, collusion and distribution losses.
According to officials, the country will face gas shortage in the winter due to wide difference in available sources and requirement as the previous government neither purchased LNG at $2, nor $6 or $8 or $12 per MMBTU, which has now reached between $40-60 per MMBTU that is too expensive to purchase.
Three companies have been issued instructions to increase import of LPG at least by 50 per cent as compared to quantity they imported last year.
Petroleum Division holds meetings with PARCO, SSGC and SNGPL on weekly basis to weigh progress in tasks given to them.
At present, it is at an initial stage but the government has also approached two countries with respect to these three companies. The companies should establish import facility, storage facility at ports and arrange bowzers for transportation and cylinders for the general public.
There is not enough indigenous gas available for the domestic sector particularly during the winter. Domestic segment consumers account for 47 per cent of the indigenous gas. Every winter costly RLNG has to be diverted to the domestic sector at subsidized rates, leading to accumulation of circular debt. Only 27 percent population of the country gets piped gas.
Insiders say that the government is expected to go for rationing of gas to domestic consumers in the winter and will provide gas at breakfast, lunch and dinner times.
However, the winter gas plan will be presented before the Federal Cabinet, once Abbasi-led Committee finalizes its recommendations as the county is facing huge shortfall in demand and supply of gas.
Copyright Business Recorder, 2022