Incongruity: Power plants stay closed despite cheaper oil
By Zafar Bhutta Published: January 18, 2015
ISLAMABAD:
The government has shut or is partially running some power plants that could be operated on highly cheaper oil, triggering increased outages and forcing consumers to pay billions in capacity charges to industry barons without receiving any electricity from them.
Experts question the rationale behind the government's move that is based on an argument that oil-based power production comes at a sharply higher cost, which is not fully recovered from the consumers.
The premise would have worked at other times but not now when oil prices in the international market have dropped more than 50%, providing the country an opportunity to book cargoes at extremely lower rates.
Not only this, the government has also stopped providing gas to some power plants, compressed natural gas (CNG) stations and fertiliser manufacturers and diverted it to the influential textile industry.