The Cabinet Committee on Energy (CCoE) on Saturday allowed Pakistan State Oil (PSO) to import furnace oil for supply to K-Electric in a bid to manage Karachi's demand for electricity in summer.

The special permission to import high sulphur furnace oil (HSFO) - two cargoes of 70,000 tonnes each - has been granted after almost two years since local refineries have not been able to fulfill the demand due to shutdowns and other unusual circumstances faced by the oil sector amid the Covid-19 pandemic.

On Saturday, KE also released a statement blaming the intermittent power outages being experienced in Karachi on furnace oil shortage as well as a 'technical issue' at its Bin Qasim plant.

'K-Electric's daily furnace oil requirement is close to 2,800 MTs per day, while at present we are receiving around 2,000 MTs per day and currently there are pending orders of close to 14,000 MTs furnace oil,' the statement said. 'These are compromising both our own ability to run generation plants and our IPPs' ability to supply power to us. This situation was further compounded due to a technical issue at BQPS-I which was resolved in the swiftest possible time by teams who worked around the clock,' the utility said, in reference to the power outages being experienced in the city. 'We regret the inconvenience caused to our valued customers,' the statement added.

The CCoE discussed HSFO demand for power plants in the country, especially in the KE system. The committee was informed that the summer demand of HSFO by the KE ranged between 2,500 and 3,500 tonnes.

While the current demand of furnace oil by the KE was around 2,800 tonnes, PSO was supplying only 2,000 tonnes due to shortage of product in the country.

Besides, PSO had curtailed the sale to some captive power plants that were supplying electricity to KE. As a result, there were fears of serious power shortfall in Karachi as summer temperatures peaked.

The CCoE meeting, chaired by Minister for Planning, Development and Special Initiatives Asad Umar, approved measures suggested by the Petroleum Division for ensuring required supplies of the product and allowed HSFO imports.

There is a ban on import of furnace oil in the country as local refineries had surplus production capacity, but at the same time due to limited electricity consumption in winter months the refineries face a serious issue in offloading their excess furnace oil production.

The meeting was also briefed on the current situation of 1,124 MW Kohala and 700 MW Azad Pattan Hydropower projects as well as signing of project agreement under the Policy for Power Generation Projects 2002 and the China-Pakistan Economic Corridor framework.

The committee approved the proposals submitted by the Ministry of Planning for signing of the relevant agreements. It further directed that other related matters such as timely availability of evacuation facilities may also be ensured.

A note has been attached with the approval by the committee that the Cabinet decision relating to water usage charges, agreed with the government of Azad Jammu and Kashmir, has to be adhered to.

The CCoE also discussed the proposals of Petroleum Division regarding sustainable supply chain of LPG in the country. It constituted a committee under Deputy Chairman Planning Commission Mohammad Jahanzeb Khan to prepare a plan of action within 15 days which will be presented to the CCoE for approval.

The meeting was attended by Advisor to Prime Minister on Finance and Revenue Dr Abdul Hafeez Sheikh, Federal Minister for Information and Broadcasting Shibli Faraz, Minister for Energy Omar Ayub Khan, SAPM on Petroleum Nadeem Babar, SAPM on Mineral Resources Shahzad Qasim and official of various divisions.

© Pakistan Press International, source Asianet-Pakistan