LAHORE, Jan 18: The US attack on Iraq could interrupt supplies of the furnace oil to the power sector and reduce its generation capacity by 60 per cent, throwing the country literally in darkness.

At present, dependence of the power sector (Wapda and the independent power producers) on the furnace oil is almost total because both dams are nearing their dead levels and gas supplies to the power plants under the Sui Northern Gas Pipeline Limited (SNGPL) snapped since December 10.

Out of installed 5130mkwh hydroelectric capacity, Wapda’s present generation is only 1,175mkwh. If last few years are a yardstick, it would not go beyond 2000mkwh. The rest of 9,600mkwh per day consumption is being met through thermal generation. All of the IPPs plants have 40 per cent gas dependence and 60 per oil generation. There are chances of improvement in gas supplies if present cold spell declines. But, again it would have limited effects.

In these circumstances, interruption in oil supply could cripple the power sector and country’s economy by affecting industrial and domestic supplies.

At present, the Water and Power Development Authority and the IPPs consume around 500,000 tons of furnace oil every month and can store oil for about 30 days. It is, however, not clear whether the Pakistan State Oil and other oil marketing companies have the capacity to store oil beyond 30-day requirement of Wapda and IPPs.

“If the strategic reserves are not built now, the country may run into severe power shortage,” says an official of the PSO. Based on the current market trends, it could be claimed that no such initiative has ever been taken either by the ministry or by the marketing companies themselves, he said.

“The new government has already established a credit line with Saudi Arabia and Kuwait for oil on deferred payments. It should not be a problem for it to store any quantity of oil required. But, it seems that the government was yet to wake up to the impending crisis, he lamented.

“The government must pass this credit facility on to Wapda and let it store furnace oil for at least 90 days,” says an official of the authority. The authority has 30-day facility, it could use government’s storage and build up its reserves for at least 60 more days. At present, the authority pays in advance to the PSO for oil purchases.

The government could extend credit facility to Wapda and let the organization build up reserves so that the country does not have to suffer unbearable dose of loadshedding, he suggested. Wapda, in one of the recent correspondence to the ministry of petroleum, tried to draw its attention towards the crisis, but it is yet to see any action on ground.

A former president of the Lahore Chamber of Commerce and Industry (LCCI) while fretting over the possibility said: “Any interruption in power supply to industry could hurt the economy beyond redemption as it was already reeling under reduced gas supplies. It may miss export orders and would not be able to meet targets.”

The government must build up its reserves on war footing as the war now seemed almost certain, specially after the re-covery of some chemical warheads on Thursday, he predicted.

“The looming crisis in the Middle East and continuing strike in the Venezuelan oil industry have pushed the prices up during the last two weeks,” says an oil expert.

Though the Opec cartel has come to the rescue, the US adventurism could disrupt oil supplies world over.

The Persian Gulf, the theatre of the war, could be the worst hit, and Pakistan being a coastal state must take pre-emptive measures to meet any crisis. Otherwise, writing was on the wall, he said.