Power: better mix – higher cost

Pakistan’s energy generation mix is improving. It had been long overdue. That said, it is not furnace oil free yet. In December 2017, it was the surplus stock of furnace oil waiting to be cleared, that resulted in shifting from RLNG to FO based generation. In January 2018, RNLG based generation was recorded the highest ever at 1603 Gwh, and coal based generation was also at highest ever monthly number of 1145 Gwh – yet the FO based generation was north of 1600 Gwh, despite almost identical total power generation.

Yes, things would have been much worse, had FO still been the base load, but imported LNG and coal are not getting any cheaper. The tariffs would soon need to be revised to cover all sorts of capacity, fuel, and interest surcharges. No matter how much additional capacity the system may have, pressing receivables could ensure more trouble.

Published in Business Recorder, 8th March, 2018