February 22, 2021 – Energy Update

Power sector competitive market in jeopardy

February 22, 2021February 22, 2021 Admin

ISLAMABAD: In an unexpected development, the PTI government, which itself earlier applauded the decision on wheeling charges Nepra took on January 11, 2021 to pave way for the country’s industrial sector to thrive with lower cost of electricity, has now emerged as a stumbling block in the way of the decision’s implementation. The Power Division, instead of notifying the decision on wheeling charges of 1 MW for Bulk Power Consumers at Rs1.50-2 per unit, has emerged as a hurdle against the decision, putting aside the clapping of federal cabinet which…

NEPRA chairman emphasises green energy

February 22, 2021February 22, 2021 Admin

Distributed generation through net-metering is one of the most effective tools to enable renewable power generation at the grass-root level and is one of the key focus areas of the National Electric Power Regulatory Authority (Nepra) for meeting increased electricity demands sustainably, said Nepra Chairman Tauseef Farooqi. Addressing the launch of a research report on ‘Barriers and Drivers of Solar Prosumage: A Case Study of Pakistan’, he said that being a power regulator, Nepra was paving the way for clean energy and establishing a liberalised power market for its consumers.…

POL products’ prices

February 22, 2021February 22, 2021 Admin

The federal government’s refusal to raise the price of POL products on the recommendation of the Oil and Gas Regulatory Authority (Ogra) for the period 15 to 28 February was made possible not through raising subsidies (which would have been opposed by multilaterals, including the International Monetary Fund, on the legitimate economic grounds that it would be an untargeted subsidy) but through a downward adjustment in petroleum levy collection. This gives rise to three rather disturbing observations. First, Ogra recommends increase or decrease in the prices of POL products by…

Asian LNG prices slip while US natural gas futures mark weekly gain

February 22, 2021February 22, 2021 Admin

Doha: Oil prices fell for a second day on Friday, retreating further from recent highs, as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather and power outages. Brent crude futures ended the session down $1.02, or 1.6 percent, at $62.91 a barrel, while US West Texas Intermediate (WTI) crude fell $1.28, or 2.1 percent, to settle at $59.24. For the week, Brent gained about 0.5 percent while WTI fell about 0.7 percent. Last week, both benchmarks had climbed to the highest in more…

Govt to reduce IPPs’ gas tariff by 35%

February 22, 2021February 22, 2021 Admin

The federal government is all set to reduce gas tariff up to 35 per cent for the independent power producers (IPPs) operating on low quality gas in a bid to rank these plants in high merit order. This plan will result in putting burden on the consumers to cross-subsidize the gas for power plants and the rate of federal excise duty may also go up. According to the current formula, the government prioritizes the operation of those power plants which operate on cheaper fuel – dedicated gas which is low…

Economic Policy

February 22, 2021February 22, 2021 Admin

Economic policy is four actions that governments take in the economic field: tax, government spending, interest rates and money supply. Our national debt is now growing at the rate of Rs18 billion a day. Our electricity sector now loses nearly Rs2 billion a day. Our State Owned Enterprises (SOEs) collectively end up losing Rs1.8 trillion a year. In the natural gas sector, unaccounted-for-gas now amounts to Rs1 billion a day. In the commodities sector, federal and provincial food departments have accumulated a debt of Rs753 billion. Public procurements by the…

IMF’s expanding shadow

February 22, 2021 Admin

After a prolonged suspension of close to 14 months in the International Monetary Fund’s (IMF) $6 billion extended fund facility (EFF) to Pakistan, a staff-level agreement to release the third tranche of $500 million was reached this week. The resumption in the facility comes after the PTI government, after having resisted at first, was forced to hike power tariffs, energy prices and taxes. The most recent increase in the power tariff of Rs1.95 per unit, a 15% increase, was across the board, which meant that for the first time in…

CPEC projects bring more than electricity to Pakistan

February 22, 2021February 22, 2021 Admin

CPEC projects not only bring electricity to us, but also train professionals, and contribute to the well-being of local people for Pakistan, said Muhammad Muneeb, a senior official of Sahiwal Coal-fired Power Station, who awarded the Outstanding Pakistani Employee of CPEC Project by the Chinese Embassy, according to a report published by Gwadar Pro on Saturday. The Sahiwal project, initiated in 2015, plays a crucial role in domestic electricity supply. Muneeb introduced to Gwadar Pro that Sahiwal lies in the industrial hub region between Lahore, Multan and Faisalabad. Its location…

Energy security: some suggestions

February 22, 2021February 22, 2021 Admin

Energy security appears to be the biggest challenge confronting the country since long. The following paragraphs are an attempt at a quick health check of Pakistan’s energy supply chain and recommending the way forward. Despite all of our cash flow issues and heavy debt, we have somehow ended up with a highly lethal energy mix which compels us to spend around $16 billion on fuel imports annually. The main reason is that during the past more than 40 years, instead of considering a long-term strategy and its execution, we have…

Potential of coal gasification

February 22, 2021February 22, 2021 Admin

With dwindling gas resources and lack of discovery of new oil and gas resources, energy dependence will increase unless dedicated efforts are made to discover new resources and increase the utilisation of existing resources. Pakistan has one of the largest lignite (brown coal) resources, which can be termed almost limitless (185 billion tons). Despite this, coal imports have been increasing and are projected to increase to 20 million tons ($2 billion) in the current year. It is due to installation of power plants based on imported coal unnecessarily in the…