KARACHI, Aug. 16: Karachi Electric Supply Company has expressed great concern over the approximate Rs. 4,400 per ton increase in furnace oil price for second fortnight of current month as intimated by PSO, and said this would prove as detrimental to the interests of both the power utility and its customers.
KESC stated that it is not in favor of any increase in the power tariff, but since the end-user tariff is a function of the primary input cost - Fuel, it is eventually passed on to the consumers. Spiraling increase in power tariffs not only creates undue burden on the electricity consumers but also has an adverse impact on the bill recoveries and collections for the utility. The increase in furnace oil price hike is one of the core factors that would further adversely impact the per unit price of electricity, affect the customers’ budget as well as KESC’s financial load.
While reiterating the stance to reduce the power tariff to an affordable level, KESC said that burning of furnace oil to run power generation turbines, was out of lack of choice. As against the current requirement of 400 MMCFD of gas, KESC had been receiving around half of it. It is this short supply of natural gas to KESC, which translates into an increased reliance on the 370% more expensive oil.
KESC urged the government to resolve the gas allocation / supply issue as a top priority, since increase in gas supply to KESC to the required level would bring down the power tariff to an affordable level, with the ultimate beneficiary being the power consumers.