Pakistan paying heavy price for running power plants on furnace oil, gas

The Islamabad Women’s Chamber of Commerce and Industry (IWCCI) said on Wednesday converting furnace oil based power plants to Thar coal can help save five billion dollars per annum being spent on import of furnace oil which is around 40 per cent of the energy mix.

Coal is the cheapest fuel for producing electricity with 41 per cent share in global power generation, its share in world’s energy mix has recorded increase of 5.4 per cent but it is yet to get proper attention in Pakistan, it said.

Pakistan import oil bill has been estimated to touch mark of $ 50 billion by 2025 which necessitates usage of Thar coal for power generation, said Farida Rashid, President IWCCI.

With 1004 billion tonnes of coal reserves left and global consumption estimated at 9.98 billion tonnes by 2030, Pakistan can become a major player with 175 billion tonnes of coal, she said while talking to business community.

She said that we are paying heavy price for running power plants on furnace oil and natural gas while the slow pace of the government’s decision to convert some power plants on coal is unsatisfying.

Farida Rashid said that switching on coal should be made easier for the private power producers seeking permission since long. She said that some two billion dollars could also be saved by ensuring merit in provision of gas to the power plants.

Coal accounts for over 50 per cent of US power generation while India is expected to overtake America by 2025. South Africa’s 93 per cent and China’s 68.7 per cent electricity comes from coal, she informed.

Conversion of power plants on coal will cut oil import bill, reduce borrowings, clip subsidies, bring production cost down, help cull circular debt, bridge budgetary gap, betterment and improve balance of payments position, said Farida Rashid.