As the year passes, Pakistan’s energy sector boasts of some success

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Pakistan energy sector boost

Year 2019 ended with some pain and gain. The government of Pakistan Tehreek-e-Insaf (PTI) may term it a year of success but it also added to the misery of the commoner.

A jolt to consumers came when the government agreed to extend energy prices under a $6-billion loan package secured from the International fund (IMF).

However, there had been no abnormal increase in international petroleum prices, which went up from $54 to $64 per barrel during the year. But at an equivalent time, the rupee depreciated massively against the US dollar, causing a rise in petroleum product prices as imports got expensive.

Prices of petroleum products were increased by up to Rs23 per liter in 2019. the value of high-speed diesel – widely utilized in transport and agriculture sector and any hike in its price impacts all sectors – went up from Rs106.68 to Rs125.01 per liter, a rise of Rs18.42 per liter.

The other major fuel is petrol which is widely utilized in motorcycles and cars. Its price rose Rs23.02 to Rs113.99 per liter. the cost of kerosene oil, used in remote areas for cooking purposes, went up Rs13.37 to Rs96.33 per liter.

Likewise, the price of light diesel fuel–utilized in the industry-went up to Rs82.43 per liter compared to Rs75.82, registering a hike of Rs7.15.

Gas prices

The PTI government raised gas prices by 190% within the year 2019, heavily burdening the consumers. It also decided to revise consumption slabs and recover a further Rs2.3 billion through inflated bills. The faulty mechanism brought misery to the consumers as despite commitment the government couldn’t reimburse anything. Unchecked inefficiency and theft continued to place an additional burden of billions of rupees on the honest consumers who were regularly paying their bills.

In the meantime, the government took some initiatives to enhance efficiency and cut losses within the gas sector. It approved an unaccounted-for-gas (UFG) reduction plan for the general public gas utilities that might be implemented over three years. As a part of the plan, SSGC will reduce its UFG level by 9.55 percentage points (or 40,629 million cubic feet of gas per day – mmcfd), which in financial terms equals to Rs20.1 billion.

Electricity prices

Electricity prices also went up to abnormal levels. Consumers were forced to pay capacity charges pending since the time of previous Pakistan Muslim League-Nawaz (PML-N) government.

Total increase in electricity tariffs was calculated at 62% within the year 2019. This included monthly fuel cost adjustments, quarterly tariff adjustments and therefore the increase in base tariff.

In a year, the PTI government raised electricity tariffs by Rs3.85 per unit on account of quarterly tariff adjustment and increase in base tariff, fueling inflationary pressure within the country.

Of the entire tariff increase, Rs180 billion was collected from the consumers to inject into those idle power plants that were not generating money. A complete burden of Rs600 billion was shifted on to consumers by increasing tariff rates of electricity and gas in 2019.

Achievements

The Power Division stressed that it had undertaken variety of initiatives to reform the power sector besides making it self-sustaining. Main emphasis of these steps was to form electricity affordable and available for all.

Citing the measures, the ability Division said an anti-power theft campaign had been launched on October 13, 2018 across the country with the slogan of intolerance for overbilling and corruption. within the campaign, Rs1.37 billion was recovered.

Apart from that, line losses were brought down by 1.4% with an impression of about Rs16 billion

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