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Budget estimates: Furnace oil import may exceed by $1b

By Fida Hussain

ISLAMABAD: The import bill of furnace oil would exceed the budget estimates by around $1 billion in the current fiscal as the Water and Power Development Authority has demanded the government to allow it to import the furnace oil to avoid an energy crisis including acute power and gas shortages following the discontinuation of natural gas to the power producers and the overall industrial sector, Daily Times has learnt.

The consumption of furnace oil has showed an increase of almost 100 percent in the current fiscal and stood at 8 million tons so far this fiscal against 4.5 million tons during the whole of the last fiscal.

“The surge in import bill is very huge. There could be abrupt rise in the import of furnace oil as almost all the gas supply to the industry and the power producers has been switched off,” a senior government official said.

The deteriorated law and order situation in Balochistan has partly damaged the gas pipelines due to which the gas distributing companies suffered losses. The losses are not only in the revenue but also precious natural resource, he said.

The official said that Wapda is of the view that it would be more dependent on the import of furnace as the hydroelectric power generation showed a decline of around 5 percent in the current financial year.

The official said that the government’s plan to allow the private sector independent power producers (IPPs) to operate their plants on the imported coal is yet to give results.

Most of the IPPs would operate in Sindh as the imported coal would be economically beneficial if they utilise the imported coal near Karachi or other parts of Sindh. The official said that due to increase in the crude oil prices in the international market, the value of import of furnace oil would put further pressure on the government budgetary estimates viz-a-viz imports.

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