One decision that the caretaker government can take to resolve the prevalent power crisis in the country is to allocate sufficient gas to power sector. The present gas allocation policy dictates that power sector should be put on top of the merit order after residential customers.
However, this policy is not being followed in letter and spirit.
As a matter of fact, a handful of large businessmen are blessed with gas allocations for their power plants in blatant violation of the current and previous gas allocation policies.
According to the conservative estimates, these well-connected business tycoons are getting as much as 250 million metric cubic feet per day (mmcfd) gas for power generation, wasting a precious national resource using small scale and low efficiency generating plants.
The power utility in this area serving 20 million people including 45,000 industrial units is getting only 120 mmcfd.
As a result of this, power utility is left with the only option to burn more furnace oil and electricity, generating almost four times more expensive electricity, resulting in substantially higher tariff, additional burden on the federal government in shape of higher tariff differential subsidy and ever-growing oil import bill.
All this is happening for the benefit of a handful of influential businessmen at the cost of nation’s economic sustainability.
Prudence demands that all such allocations for captive power plants should be cancelled immediately and gas so released be supplied to power utilities.
Advantages of this simple though politically tough decisions are immense; country’s gas-fired generation capacity will be fully utilized, resulting in reduction in power outage; government’s oil import bill will go down substantially; the cost of electricity generation will go down by one fourth; government’s expense on tariff differential subsidy will decrease drastically; and consumer tariff will be stable for the foreseeable future.
The circular debt issue will be addressed largely by taking just this one step.
These tangible benefits provide enough justification to the government to move swiftly and do the right thing. After all, it is government’s responsibility to ensure such public policies that focus on whole community rather than making a few richer.
In case of gas allocation, the policy seems alright but the execution is lacking and someone has to take the bull by the horn sooner or later.
The present situation is simply not sustainable.
Government does not have the resources to fund tariff differential claims of the power sector and power plants are shutting down as a result of severe cash flow crises.
The situation is getting worse by the day and the country’s economic progress is retarded to say the least.
We are simply heading towards the worst economic and social disaster and unfortunately we don’t have the time to waste for the new elected government to take charge of the situation.
The caretaker setup has the responsibility and the opportunity to make one profound decision that would make so many things right.
Whether they act boldly or shy away from their core responsibility will determine the mettle of this so called competent caretaker setup.