Yes, to already worsening conditions, the power supply situation is set to be further deteriorated, especially in Karachi, as K-Electric’s financials are badly under the weather to an extent of its inability to pay fuel bills, thanks to subsidies that are not being paid and the freezing tariff by the government.
Senior official sources told to a news channel that K-Electric had been conveyed to the federal government that the company is not in a position to pay off debts to both gas and furnace oil supplies – Sui Southern Gas Company Limited (SSGCL) and Pakistan State Oil (PSO).
They also said that a meeting of key stakeholders including Minister for Energy Omar Ayub Khan, Special Assistant to the Prime Minister on Petroleum Nadeem Babar, Sindh Governor Imran Ismail, managements of KE, and provincial representatives and other entities, reviewed the situation and now, felt the need for the professional handling, without political considerations, as the crises are getting non-manageable.
However, Syed Moonis Alvi, KE chief executive, gave a sigh of relief, saying that the positive discussions had held with the federal government and the situation will soon move towards solutions.
Responding to a question regarding the tariff, he said the government should notify the tariff hike so that both KE consumers and the national power tariff get equal.
SSGCL provides about 300 million cubic feet per day of gas for 1,000MW of power generation to KE, which is now reduced to 200 million; the non-payment of Rs14bn (increasing at a rate of about Rs4bn per month) to SSGCL will lead to the immediate closure of LNG supplies. PSO supplies Rs6-7bn worth of fuel to KE per month.
As if it is not enough, PSO owes over Rs350 billion to KE, which is also suspended due to circular debt of over Rs2.2 trillion and deferred payments by Saudi Arabia.