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April 19, 2019

Government weighs one-time furnace oil import

Business

April 19, 2019

ISLAMABAD: The Cabinet Committee on Energy (CCOE) on Thursday decided to take the federal cabinet’s permission for one-time import of furnace oil to fuel energy-deficient power plants in the wake of widening electricity shortfall.

The committee took the decision during a meeting to place the matter for approval before the federal cabinet to allow one-time import of furnace oil.

The petroleum division told the committee that there is a need of 350,000 tons of furnace oil to meet energy requirements of the country for the May-June 2019.

The previous government decided to phase out furnace oil import that accounted for a quarter of the country’s total imports of $40.754 billion in the first nine months of the current fiscal year.

The committee further directed the power division to ensure uninterrupted supply of power during Ramazan. The CCOE expressed concern over complaints of longer duration of load shedding in rural areas. It asked the power division to adopt uniformed policy for load management in urban and rural areas without discrimination.

The officials of the power division told the committee that the government recovered more than Rs318 billion from power defaulters during the four months period as the ministry of energy accelerated efforts to recover unpaid electricity bills to ease circular debt. The officials said the recovery campaign achieved its objectives by collecting Rs318.264 billion from November 2018 to February 2019 and arresting 4,225 defaulters.

Alone in one year, circular debt swelled by Rs450 billion on escalating technical losses, power pilferage and delayed tariff determination. An estimate puts total circular debt at more than Rs600 billion after the government eased the burden on exchequer through borrowing Rs200 billion from sukuk in local market.

The government planned another Islamic bond to further hack the pileup to meet its circular debt target of Rs225 billion by the yearend.

The power division presented its internal audit report on quarterly dollar indexation by the National Electric Power Regulatory Authority (Nepra). The report found that Nepra used high exchange rates during determination of quarterly indexation.

The committee asked the power division to ascertain from the regulator whether it has judicially applied its mind while determining the exchange rates.

“The regulator should also be asked to indicate the remedial measures for rectifying the mistake, for the future and to determine how the losses incurred, if any, could be made good,” it said in a statement.

CCOE was also updated on Renewable Energy Policy 2019 and was informed that the draft of the policy was circulated among relevant quarters and would be submitted to the cabinet in the first half of May 2019.

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