Hammad Azhar, Miftah Ismail spar on Twitter over use of furnace oil for power generation

Hammad Azhar, Miftah Ismail
Minister for Energy Hammad Azhar and former finance minister Miftah Ismail on Sunday sparred on Twitter over the use of furnace oil for power generation.

It all began when Azhar tweeted a thread to "clarify some misconceptions" on the status of operations in the country's refineries and the use of furnace oil.

The energy minister said that this summer Pakistan faced a "moderate shortage" of furnace oil as furnace oil power plants ran more than last year, attributing it to a merit order that ranks available sources of energy in ascending order of costs associated. He said furnace oil had to be relied on due to low water levels in dams. Consequently, furnace oil consumption was 116% higher.

He went on to state that for winter, 200,000 tonnes of furnace oil has been imported due to three reasons: a higher demand projection, risks of further default by LNG cargoes and low stock levels at independent power producers.

Azhar said that fortunately, during the November-December period, no defaults of LNG cargoes were experienced and so with LNG supply intact, furnace oil plants did not need to run.

The minister continued to say that furnace oil plants are indeed running again currently but that is because of lowering flows from dams as canals have been closed (an annual activity usually done for maintenance purposes). He said that in a couple of days, these plants will be consuming 13,000 tonnes per day of furnace oil.

"Local refineries produce only half that volume and IPP stock levels are still below the required levels," he added.

He assured readers that the country is "well stocked on furnace oil" in case any further LNG cargo defaults are experienced.

Meanwhile, the surplus of furnace oil at some refineries is being given to IPPs whose furnace oil consumption "is already above 6,000 tonnes per day".

Azhar also said that a "new refinery policy" is being finalised to shift refineries away from furnace oil production.



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