Pakistan’s power system has a power generation dependable capacity of 30590 MW. Good enough to take care of peak demand come summers. The demand is almost halved during the winters, but the generation during January 2019 was lower than that in the same period last year – by almost 4 percent. Yes, the demand has slowed down considerably – but the fact that there is still load management – tells that the financial bitter realities continue to dictate how much power ends up being generated.

Of the 7.7 billion units generated in January 2019 – furnace oil had the biggest share at 22 percent. Yes, furnace oil. The very furnace oil which was supposedly put to rest a few months ago, with nil FO based generation in November 2018. But anyone remotely familiar with the state of affairs knew the FO was not going anywhere – and here it is. And it is not even summers yet.

The hydel generation is the lowest every January and 2019 was no different – and the drop of almost 0.86 billion units from previous month was compensated by an almost similar increased in FO based power generation. That has mostly been the story. When hydel goes down, FO plants are up and running. The local refineries will continue to produce FO – and with no immediate way out in sight – it will continue to be lifted by the government – and FO based power will continue being generated.

Little wonder then that the fuel charge bill for January 2019 was 17 percent higher year-on-year, despite 4 percent lesser generation. The average rate of fuel in January stood at Rs7.7 per unit – the highest in at least 37 months. Almost all furnace oil based plants generated some units – regardless of their respective positions on the merit order. Most FO based power plants sit very low on the merit order – but the procured furnace oil had to be utilized somewhere – and what better option than to do it at the cost of the poor paying consumer?

Equally worrying is the ever dwindling contribution from RLNG power plants – the share of which has come down to 15 percent from as high as 25 percent just six months ago. In absolute terms, RNLG generation had peaked to 3.37 billion units in a month – which is now down to a little over a billion units. Whether this is a case of poor import planning by the authorities, or a deliberate effort to ensure FO based generation – is best known to the authorities. What is known for sure is that reduced RLNG based generation is inflating the average fuel price – and various power plants sitting high in the merit order are either generating less than power, or are completely idle.

The distribution mess and the circular debt story have shown no signs of improvement. The generation side was supposed to at least do better – but it is so far being a drag in terms of both actual generation, and affordability. There is also a small matter of generation losses at 4.27 percent in January – the highest in recallable memory.

It is all getting messy in the power sector. Inaction is not an option. Privatization is. But is anyone listening?