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Pakistan government releases $405.1 million to reduce loadshedding
Publication Date : 01-07-2014
The government released 40 billion Pakistani rupees (US$405.1 million) to the power companies and Pakistan State Oil (PSO) on Monday to ensure reduction in the duration of loadshedding.
A finance ministry official said with the disbursement on the last day of fiscal year 2013-14, the power sector subsidies had reached 292 billion Pakistani rupees ($2.96 billion)– 40 billion Pakistani rupees ($405.1 million) more than 252 billion Pakistani rupees ($2.55 billion) allocated in the budget, but the subsidy target had been revised to 292 billion Pakistani rupees ($2.96 billion) under supplementary grants.
Of the amount released on Monday, 23 billion Pakistani rupees ($232.9 million) was provided to PSO to improve its cash flows and enable it to retire letters of credit due to international oil suppliers.
PSO has been given 36 billion Pakistani rupees ($364.6 million) during June as 13 billion Pakistani rupees ($131.7 million) was disbursed early in the month.
The remaining 17 billion Pakistani rupees ($172.2 million) has been provided to power companies for payments to the banking sector of interest for the last quarter of the fiscal year.
The disbursements were approved by the prime minister who had instructed the relevant quarters to ensure uninterrupted power supply during Sehr, Iftar and Taraveeh and avoid unannounced loadshedding during Ramadan.
A PSO official, however, said the disbursement would settle outstanding international liabilities but the company required at least 70 billion Pakistani rupees ($708.9 million) more to build an inventory necessary for a smooth supply chain, although that too would be quite short of mandatory stocks.
He said PSO’s receivables from the power sector were 170 to 175 billion Pakistani rupees ($1.72 to $1.77 billion).
Another official said the power sector receivables from consumers had swelled to 520 billion Pakistani rupees ($5.27 billion) even though the recovery had slightly improved in recent weeks.
The recoveries were significantly less than the electricity supplied by the distribution companies.
A power ministry official said that while weather conditions were getting favourable as demand declined, it had set a target of capping loadshedding in urban areas at five hours and in rural area at seven hours a day.
He said the generation companies were producing 14,500MW to a maximum of 15,000MW with a shortfall of 4,300 to 4,500MW, resulting in an average of up to nine hours of loadshedding.