All of you may remember Govt. announcing "No Load Shedding on Eid Days" How do you think it was possible if they could not produce extra for 2-3 days? there is no mechanism, at least in Pakistan, where we can store 15,000 MW to be used later...production can quickly increase if more oil is supplied to Thermal Stations (something which Interim govt is trying to do by releasing funds for furnace oil) however governments can not do it for any longer period of time since we don't collect enough revenues from distribution of electricity to enable us to sustain high production and supply..(last year such losses were around Rs. 750 billion; govt paid Rs. 402 billion to reduce the loss but the circular debt still increased by a net 350 billion)
The real core problem lies in: electricity theft, ie large sections of Pakistani populations, rural farms with hundreds of tube wells, government departments, residents of FATA and large pockets of populations in Karachi, Sindh, Seraiki belt, KPK and Baluchistan etc not paying at all or not paying full bills for the cost of electricity they are consuming. (so around Rs. 750 billion last year, approximately) They have been doing this ever since, or for the past several decades and these losses of revenue were absorbed by other citizens and institutions across other parts of country. However 10-15 years ago we had a larger share from cheap hydro-electric energy from Rs. 1- 1.50 per KWH (Mangla, Tarblela and Warsak) so it was relatively easy to absorb these losses and thefts. Now we produce around 70-72% from Gas and Oil; basically around 40% from Oil which costs us around Rs. 16-17/KWH. It is no longer possible to absorb that 25-30% loss and theft built into the system. In addition most of our Thermal Units have old engines which consume lots of oil making it even more expensive to produce through them. (corruption too is involved here)
Dr. Mifta Ismail, (Phd, Public Finance, Wharton Business School) a strategist par-excellence with PMLN Team will explain in today's program that the new PMLN/Nawaz govt has three strategic steps to take: One, clearing the Rs. 500 Billion Circular Debt with immediate effect to let the system breathe (how they will do it, we don't know?) Second, to increase production from Gas fed Units which are relatively cheaper than Oil - costing around Rs. 5-6/KWH as compared to Rs. 17-18 for Oil -; Third, by diverting Oil supplies to efficient Units instead of inefficient Units, something which PPP government should have done but did not do.
However these are only short term strategies and will not provide long term relief unless we control the massive theft that is going all across Pakistan and is being referred to as "Line Losses"...which is by the way around 32% in India as compared to 20-25% in Pakistan; this is a political and governance problem...I have certain solutions in mind which I have discussed in this Monday program with Dr. Mifta Ismail, Dr. Farrukh Saleem and Mr. Shamsul Haq, Ex-Chairman Wapda...watch it and I will try explaining them in another note...we need innovative strategies to deal with this challenge and that will the real test of the new governments in the Center and the provinces...including the PTI government in KPK because that province has high incidence of theft and revenue loss....
Let's stay in touch on this issue of vital national importance and let's find a solution...
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