KESC to be paid the price differential for continuous power supply – Pakistan oil & gas sector update

KESC to be paid the price differential for continuous power supply – Pakistan oil & gas sector update

PAKISTAN: It has been learnt from reliable sources that federal government of Pakistan will be providing billions of rupees to Karachi Electric Supply Company (KESC) to balance the difference in furnace oil and gas prices that
ensured continuous power supply to the industrial, commercial and residential sectors during the month of Holy Ramadan.

"The government has constituted a committee to finalise the mechanism to disburse the claim submitted by the Sui Southern Gas Company Limited (SSGC) and Pakistan State Oil (PSO)," sources said. 

Company’s internal documentation records show that President Asif Ali Zardari reviewd the crisis of frequent power failures and energy shortfall at Governor House Karachi on 29^th of July 2011.

After meeting the officials from WAPDA and KESC, the President decided to take actions to reduce the electricity load shedding during Ramadan and Eid Holidays. On directions from Asif Ali Zardari, adequate fuel and and gas was
supplied to KESC in form natural gas and furnace oil by means of financial assistance.

It was agreed in the meeting that SSGC would supply 200 mmcfd of natural gas. On the other hand, Pakistan State Oil (PSO) was advised to supply 1700 tons per day additional furnace oil to Karachi Electric Supply Company.

It was further revealed by the documents that the fuel oil requirements for the said period were calculated to be 56,000 tons by Pakistan State Oil Agency, which is estimated to cost around rupees four billion.  KESC would pay
price equivalent to gas against the actual high sulphur furnace oil (HSFO) supplies plus applicable sales tax on HSFO to PSO, in advance, using its own reserves.

The Finance Division will be responsible of paying the price differential approximately Rs 2.6 billion between the HSFO and gas would through Ministry of Water and Power within a month’s time from the date of submission of claim.

PSO will be submitting the claim for the price differential, which would be verified by KESC and SSGC to Ministry of Water and Power for reimbursement by Finance Division within one month.

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Posted by Ahmed Tariq on Nov 22 2011. Filed under Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry