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Power transmission, distribution losses swell to whopping Rs520 billion in FY21-22

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1 year ago

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  • PESCO purchased 16,560 units and sold 10,355 units.
  • IESCO caused losses of Rs21.9 billion; purchased units stood at 13,027.
  • LESCO losses stand at 11.52%, which is equivalent to Rs72.7 billion.

ISLAMABAD: Power sector’s Transmission and Distribution (T&D) losses have surged to whopping Rs520.3 billion with Peshawar Electric Power Supply Company (PESCO) registering the highest-ever deficit of Rs153.8 billion, in just one financial year, The News reported on Monday.

The cash-bleeding power sector’s accumulated losses have crossed the defence spending of the country in the last two financial years, and there seems no sigh of relief for the masses without undertaking basic and fundamental reforms.

The question arises as to why the board members of these loss-making power distribution companies (DISCOs) are not being appointed on merit. The answer is that such appointments are used as a tool for doling out benefits to politically motivated favourites instead of making decisions on merit.

According to the official data available with The News, the total purchased units were 130,158 gigawatt hours (GWh), out of which sold units stood at 107,860 units; so the lost units stood at 22,298 units of GWh in the financial year 2021-22. The target losses of T&D are envisaged at 13.41%, but actual losses went up to 17.13% in the financial year 2021-22.

PESCO purchased 16,560 units of GWh of electricity and sold 10,355 units, so the lost units stood at 6,205 of GWh. Losses of PESCO stand at 37.47% and those went up to Rs153.8 billion in money terms in the current fiscal year. The losses of Tribal Electric Power Company (TESCO) stand at 9.33% and at Rs3.7 billion in money terms. Total purchased units stood at 2,284 units and sold units 2,071, so the lost units of electricity estimated at 213 of GWh.

The losses of Islamabad Electric Power Company (IESCO) stand at 8.18%, which caused losses of Rs21.9 billion in money terms. The total purchased units stood at 13,027 and sold units were 11,961, so the lost units of electricity were estimated at 1,066 units of GWh.

The Gujranwala Electric Power Company (GEPCO) losses stand at 9.07% to the tune of Rs24.7 billion.

The Lahore Electric Power Supply Company (LESCO) losses stand at 11.52%, which is equivalent to Rs72.7 billion. The lost units in case of LESCO are estimated at 3,264 units of GWh in the fiscal year 2021-22.

The losses of Faisalabad Electric Power Company (LESCO) stand at Rs33.4 billion, equivalent to 9.1%. The losses of Multan Electric Power Company (MEPCO) stood at higher side, amounting to Rs75.1 billion. The losses of MEPCO stand at 14.84%.

The losses of Hyderabad Electric Power Supply Company (HESCO) have gone down from 38.55% in 2020-21 to 32.88% in 2021-22 and in financial term stood at Rs45 billion.

The losses of Sukkur Power Supply Company (SEPCO) remained unchanged and stood at 35.27% in 2020-21 and 35.62% in 2021-22. In financial terms, the losses of SEPCO stand at Rs43.7 billion.

The losses of Quetta Electric Supply Company (QESCO) stood at 28.07% and in financial terms escalated to Rs46.3 billion in financial year 2021-22.

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Gold prices in Pakistan approach an all-time high.

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Following a substantial surge the prior day, gold prices in Pakistan are ascending to unprecedented levels with an additional gain on Thursday, coinciding with a rise in global precious metal rates.

The price of 24-karat gold in the local market rose by Rs700 per tola, reaching Rs277,900, as reported by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Likewise, the cost of 10 grams of 24-karat gold increased by Rs600, currently priced at Rs238,254.

Globally, gold prices exhibited an upward trend, increasing by $7 throughout the day. The APGJSA reports that the international gold price was $2,682 per ounce.

Notwithstanding the increase in gold prices, the silver market exhibited stability, with the price of silver maintained at Rs3,050 per tola.

In the previous month, gold prices in Pakistan reached an unprecedented high of Rs 277,000 a tola, driven by substantial gains in the worldwide market.

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World Bank: Power industry subsidies soar by 400% in just five years.

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Ninety-four percent of domestic customers will benefit from the budgetary subsidy in 2024, according to a World Bank report, which credits the increase in protected consumers with contributing to the weight of subsidies.

In the current fiscal year, the electricity sector subsidy has increased by an astounding Rs. 954 billion, from Rs. 236 billion in the 2020 fiscal year to Rs. 1190 billion.

Notwithstanding changes, the circular debt has averaged Rs. 400 billion yearly over the last four years due to the incapacity to minimize losses and inadequate recovery of electricity payments.

According to the World Bank, the government must solve the fundamental problems in the power industry in order to lower the burden of subsidies and circular debt, as rising electricity prices and inadequate tax collection will only serve to worsen the circular debt crisis.

The rise in Pakistan’s power sector circular debt has raised worries from the World Bank (WB) despite an unprecedented increase in energy pricing.

Within the last six years, the debt has grown by 1241 billion rupees, according to the World Bank’s study. Between 2019 and 2021, the debt climbed by 1128 billion rupees.

The electricity sector’s circular debt has been increasing at an alarming rate, according to a World Bank analysis. Between 2022 and 2024, there was a substantial increase of 113 billion rupees.

Pakistan’s electricity industry has 2393 billion rupees in total circular debt as of 2024.

Restructuring is required to solve the circular debt issue, according to the World Bank.

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Business

Final settlement: Govt to pay five IPPs Rs 72 billion.

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On October 10, Prime Minister (PM) Shehbaz Sharif declared that the agreements with five IPPS would be terminated in the first phase. Sources claim that the government will give Rs 15.5 billion to Rousch Power and Rs 36.5 billion to Hubco.

In a same vein, the federal government would pay Lalpir Power Rs 12.8 billion, Atlas Power Rs 15.5 billion, and Sapphire Power Rs 6 billion.

The sources state that late payment fees are not included in the settlement. With effect from October 1, the agreements with the five IPPs will be considered officially ended.

PM Shehbaz earlier remarked that the termination was carried out with the owners of the IPPs’ mutual permission while presiding over the federal cabinet meeting in Islamabad.

The Prime Minister notified the Cabinet that the only money that will be paid, interest-free, to these IPPs is the outstanding balance.

According to him, the national exchequer will gain over 411 billion rupees from the termination of these contracts, while power customers will save roughly sixty billion rupees.

According to Prime Minister Shehbaz Sharif, it was the result of the arduous teamwork of the entire government. In this regard, he also acknowledged the contributions and assistance of the associated parties. He specifically mentioned General Asim Munir, the Chief of Army Staff, who showed a personal interest in the situation.

The prime minister characterized the development as the start of a trip that will ultimately lead to the advancement and prosperity of the populace.

PM Shehbaz Sharif also brought up the assistance that the Punjabi and Federal governments gave to power users over the summer.

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