IPPs reluctant to produce power on expensive diesel.

Byline: Khaleeq Kiani

ISLAMABAD -- Amid tight demand and supply situation, the fuel related problems continue to jolt the entire energy sector chain, compelling the authorities to shift some of the power plants on high-speed diesel (HSD) - the most expensive fuel.

Informed sources told Dawn that with upsurge in power demand following increase in summer temperatures, the authorities were literally utilising all fuels to run maximum power plants in the public and private sector to minimise electricity loadshedding.

These sources said some private parties were requesting the government to allow them LNG imports for direct sales to private power plants, textile and CNG sector at almost half the price at public sector entities - PSO and Pakistan LNG Ltd (PLL) - were importing LNG but were facing institutional resistance.

The diversion of re-gasified liquid natural gas (RLNG) from Sui Northern Gas Company Ltd (SNGPL) to Sui Southern Gas Company Ltd (SSGCL) to improve power generation in Karachi and reduce electricity shortage had turned upside down the merit order of the National Transmission and Despatch Company (NTDC).

Seek permission to import LNG

The Independent Power Producers (IPPs) are protesting over low LNG supply who had been directed to utilise high-speed diesel for power generation instead of LNG. Last week, the government had also ordered import of furnace oil - another expensive fuel - to meet power demand in the national grid and KE system.

Informed sources said the SNGPL was hardly in a position to meet the fuel requirement of three bigs - Bhikki, Balloki and Haveli Bahadur Shah of about 1320 megawatts each. It was compelled to give up 80-150 million cubic feet of gas for Karachi.

Resultantly, the Central Power Purchasing Agency (CPPA) was asking many other private sector plants to utilise HSD. Sources in at least four IPPs confirmed to Dawn that they had been asked to get prepared for HSD. This in turn is also adding pressure to the already tight supply chain of HSD for transport fuel. As of now, total HSD stocks were no more than nine-day transport consumption.

As if that was not enough, the utilisation of HSD and furnace oil for power generation would significantly increase the fuel cost and burden the consumers who were already breaching their slab benefit limits because of higher consumptions.

On Monday, two IPPs formally wrote to Ministry of Energy Omar Ayub Khan to protest over the latest situation. Seen by Dawn, letters by...