The News reported that the allocation of gas for the power generation sector has steadily gone down in last 5 years to 28.7% from 43.5% in 2005 raising its dependence on oil and inflating electricity bills.

Officials of Karachi Electric Supply Company said that Furnace oil is 3.7 times as expensive as gas which makes its use in power plants costly and frustrates the efforts of power distribution companies to control theft.

Mr Tayyab Tareen CFO of KESC said that “Average consumer tariff is set to go up by 50% to PKR 14.33 KWH from the current PKR 8.6 KWH. Can you imagine the impact on inflation?”

He said that technically, the tariff of KESC’s customers in Karachi has already gone up to PKR 14.38 per KWH in February 2011. It’s a matter of time before the government passes it on to the consumers as part of its international commitments to remove subsidies.

Sui Southern Gas Company has announced reduction in gas supply to KESC to 80 million cubic feet per day from 180 MMCFD. KESC uses both furnace oil and gas to run its power plants with 60% of the requirement met by gas.

Mr Tareen said that the government had allocated 276 MMCFD to KESC but supply had remained less than 200 MMCFD. In last four months it has gone down to as low as 93 MMCFD. The industrial tariff which averages PKR 8.41 per KWH currently could jump to PKR 13.01 per KWH if gas supply drops to 100 MMCFD.

(Sourced from www.thenews.com.pk)