Govt plans load-shedding, tariff hikes to manage summer power shortfall

The government is preparing a mixed strategy to deal with the expected electricity shortfall this summer, combining scheduled power outages, stricter energy-saving measures, and higher electricity tariffs.

This approach comes as the country faces mounting challenges due to the ongoing crisis in the Middle East, which is affecting fuel supplies.

Officials say the Power Division is working on different scenarios to manage rising demand during the summer months, especially as supplies of key fuels like liquefied natural gas (LNG) and coal are expected to decline, said a report by Dawn News on Monday.

LNG, which contributes more than one-fifth of the country’s electricity generation, is likely to become almost unavailable from next month, regardless of whether the geopolitical situation improves. At the same time, both imported and domestic coal supplies are also expected to remain limited, putting further strain on the power system.

To fill this gap, the government may rely more heavily on furnace oil, a costly alternative that is usually used only during peak demand periods. Although current stocks are sufficient for several weeks, the price of furnace oil has surged significantly due to disruptions in global supply routes and refinery operations. Compared to other fuels, electricity generated from furnace oil is far more expensive, which will likely increase overall power generation costs.

Estimates suggest that fuel costs could rise sharply, potentially adding Rs 10 to Rs 12 per unit to electricity prices. This increase is largely due to the reduced use of efficient LNG-based power plants, which together produce around 5,000 megawatts. Passing on the full cost increase to consumers, especially industries, may not be feasible.

Meanwhile, electricity generated from high-speed diesel is considered too expensive to use and will likely be avoided, particularly because of its importance for transportation and agriculture during the harvest season.

Electricity demand typically peaks between 27,000 and 28,000 megawatts in summer, compared to current levels that are much lower, partly due to the growing use of solar energy. To manage peak loads, furnace oil-based plants may be used because they can quickly increase output when needed.

Given these pressures, authorities are planning for an average of two to three hours of daily load-shedding, although the exact duration will depend on fuel availability. At the same time, consumers will likely face higher electricity bills through existing pricing mechanisms, while conservation efforts will be enforced more strictly.

Gas supply constraints are also a major concern. From April onward, a significant portion of the gas currently allocated to power plants will no longer be available. To compensate, supplies to sectors like compressed natural gas (CNG) and fertiliser production may be reduced or redirected toward electricity generation.

In addition to external challenges, internal issues are further complicating the situation. Disputes between Pakistan Railways and certain coal-fired power plants are disrupting coal transportation, putting up to 1,800 megawatts of generation capacity at risk. Problems such as delays in coal loading and shortages of railway wagons have made fuel supply unreliable for key plants.

These coal plants play an important role in maintaining grid stability, especially those located near major demand centres. Currently, they produce a significant share of the country’s electricity, but their limited fuel reserves, enough for only a few days, could lead to even longer power outages if not replenished in time.

The issue has also affected railway revenues, as coal transport for these plants makes up a substantial portion of its freight income. While one plant has been allowed to switch to road transport for coal, others are still in the process of arranging alternatives, which could further raise costs.

The matter has been escalated to senior government officials, who are expected to intervene to resolve the transport and coordination issues.