ISLAMABAD – The finance ministry has reportedly refused to provide Rs57 billion sought for supply of furnace oil to power plants in next three months, threatening the government plan to minimise the electricity shortages ahead of the elections.
Sources said the interim government did not want any furious protest demonstrations over loadshedding as, in fact, it aims at improving the general law and order situation in the country and create an environment conducive to holding of free and fair general elections.
Caretaker Prime Minister Mir Hazar Khan Khoso on Thursday chaired a meeting on energy crisis and constituted a committee to suggest policy decisions for bridging the demand and supply gap. The committee is likely to finalise its report by Monday.
The country is facing massive scheduled and unscheduled loadshedding of 16 hours in rural areas and 8-12 hours in urban areas, and the situation is likely to worsen in the upcoming months when summer starts showing its colours.
Sources said that in order to reduce this large quantum of loadshedding, the petroleum ministry had asked the finance ministry to provide Rs57 billion so it could supply furnace oil to the thermal generation plants to increase the power generation in April, May and June. But the finance ministry refused to release the payment saying it does not have the fiscal space to make such a large unbudgeted injection, they said.
The sources said that as per their plan, the petroleum ministry was to accrue total Rs109 billion for supply of furnace oil to power plants for the three months. Of this, Rs52 billion are to come through recovery from private sector defaulters, for which the National Accountability Bureau has already been directed, while the remaining Rs57 billion were to be sought from the finance ministry.
But the finance ministry says it does not have fiscal space to provide the said amount as it has already provided Rs265 billion in nine months (July-March) of the ongoing financial year 2012-2013 against the revised allocation of Rs291 billion for the entire fiscal year. It has instead urged the Ministry of Water and Power to bring its house in order by improving governance and reducing theft and line losses. The finance ministry believes that subsidy to the power sector has adversely impacted the fiscal deficit which is expected to exceed 8 percent in the current fiscal year.
The sources said that if the prime minister did not intervene or the committee formed to solve the energy riddles failed to come up with some breakthrough, the power situation is set to get worse. If the things remained as they are now, it would lead to electricity shortfall of over 7,000MW with loadshedding of between 12 and 18 hours in peak summer season.