CNG, Petrol, Power etc Some explaination

[raza1]

Oh just observed that the source is Saeed Khan Jadoon Sb.'s presentation which he gave in Serena Hotel Islamabad somewhere in March or April 2011.

Lolz... simply lolz.. just try to find out any person who attended the presentation and ask about the question answer session.

[fahadwizz]

Ok buddy, got my hands on the hard copy of statistical supplement of Economic Survey FY2011. I guess the above quoted source was not reliable. My bad!

[raza1]

Ok buddy, got my hands on the hard copy of statistical supplement of Economic Survey FY2011. I guess the above quoted source was not reliable. My bad!

Yes, and it is the fastest growing sector w.r.t to gas consumption, showing growth of 25%, thats why everyone is concerned about it. We do not have gas in abundance so this need to be stopped here, until new reserves are discovered and discovered reserves are extracted.

[hasooboy]

the general people will have to improvise themselves, start to carpool, its simply not workable for every single person to drive their own car to work in Pakistan. The authorities should get foriegn firms to bring in proper mass transit systems, foreign because Pakistan completely lacks such discipline in education and hence cannot deploy.

Yes that's the right solution but sadly we don't have enough good transit system i still remember those days when green buses and metro was ruining on road i always used to travel on them, but due to transport mafia they didn't last long.

[fahadwizz]

@raza1
May be we should stop selling cars?

Fuel needs will rise as more cars come on the road and since we do not have an alternative to natural gas. As quoted in the above table transportation already consumes 47% of total oil. If all cars running on CNG are shifted to petrol, this number will rise drastically. Last year we imported around $12.5 billion worth of oil, this year its going to be much more.

So what do you propose when you object to the sale of CNG?

[fahadwizz]

Yes that's the right solution but sadly we don't have enough good transit system i still remember those days when green buses and metro was ruining on road i always used to travel on them, but due to transport mafia they didn't last long.

Used that green bus & Metro a lot for college back in 2002-03.

[ehalin]

@raza1
May be we should stop selling cars?

Fuel needs will rise as more cars come on the road and since we do not have an alternative to natural gas. As quoted in the above table transportation already consumes 47% of total oil. If all cars running on CNG are shifted to petrol, this number will rise drastically. Last year we imported around $12.5 billion worth of oil, this year its going to be much more.

So what do you propose when you object to the sale of CNG?

I am not an expert but I don't think there will be much impact on the oil import bill due to 2 reasons: 1. The additional NG can be used in power generation and will substitute imported furnace oil or diesel, 2. since CNG is cheap there is some wastage as well or what you can misuse, this wastage will be reduced. So probably you shouldn't worry about oil import bill.

[fahadwizz]

I am not an expert but I don't think there will be much impact on the oil import bill due to 2 reasons: 1. The additional NG can be used in power generation and will substitute imported furnace oil or diesel, 2. since CNG is cheap there is some wastage as well or what you can misuse, this wastage will be reduced. So probably you shouldn't worry about oil import bill.

All gas powered IPPs are already getting all the gas they need. The problem with power sector is insufficient total output. It means we need more IPPs but putting new ones on gas will be a senseless investment in the current scenario. We don't have enough power plants is the reason we borrowed some from Turkey under rental power agreement.

I am thinking coal for power plants. Just like cement plants.

You are highly mistaken, the oil import bill will rise considerably. 61% cars in Pakistan run on CNG if 39% transport on oil utilizes $ 6 billion worth of oil then you can safely double this amount to $12 billion just for transportation. That's 6 billion dollars worth of oil while our reserves stand at $ 13 billion.

[ehalin]

All gas powered IPPs are already getting all the gas they need. The problem with power sector is insufficient total output. It means we need more IPPs but putting new ones on gas will be a senseless investment in the current scenario. We don't have enough power plants is the reason we borrowed some from Turkey under rental power agreement.

I am thinking coal for power plants. Just like cement plants.

You are highly mistaken, the oil import bill will rise considerably. 61% cars in Pakistan run on CNG if 39% transport on oil utilizes $ 6 billion worth of oil then you can safely double this amount to $12 billion just for transportation. That's 6 billion dollars worth of oil while our reserves stand at $ 13 billion.

I think you should make your record straight. Now a days there is hardly any power generation on gas. Most of the power generation now a days is on furnance oil and diesel. People will see its effects in coming days when they receive fuel surcharge in their electricity bills. Even if we give all the gas to the power stations we cannot right now meet our demand for electricity. The acute problem with the power sector is the circular debt which if you are able to understand is the inability of WAPDA to pay the cost of fuel required for generating electricity. And a part of this problem lies in the high cost of fuel as well since we generate most of our electricity on imported oil. Believe me some times WAPDA resorts to load shedding while power plants are shut down due to fuel shortage.

Rental power plants were a scam similar to CNG pumps.

WAPDA's problem at this point of time is 1. high cost of electricity (due to skewed fuel mix i.e., less hydel, no gas and more oil based thermal generation,) 2. not enought revenue due to bill defaults, & 3. not enough capacity in transmission and distribution network. The generation capacity comes at no. 4 in this list. Even today there are many power stations which are shut down due to fuel shortage despite load shedding.

[raza1]

@raza1
May be we should stop selling cars?

Fuel needs will rise as more cars come on the road and since we do not have an alternative to natural gas. As quoted in the above table transportation already consumes 47% of total oil. If all cars running on CNG are shifted to petrol, this number will rise drastically. Last year we imported around $12.5 billion worth of oil, this year its going to be much more.

So what do you propose when you object to the sale of CNG?

I propose that industry should be provided with all gas, industrialization means prosperity via more jobs, increasing the purchasing power of an ordinary man. After that we will be able to afford the Hi octane even.

[fahadwizz]

I propose that industry should be provided with all gas, industrialization means prosperity via more jobs, increasing the purchasing power of an ordinary man. After that we will be able to afford the Hi octane even.

You totally missed the basic point of all that i have written above. How do you propose we arrange dollars to import your Hi-Octane. You must understand the difference between the Money in circulation & dollar reserves.

[fahadwizz]

I think you should make your record straight. Now a days there is hardly any power generation on gas. Most of the power generation now a days is on furnance oil and diesel. People will see its effects in coming days when they receive fuel surcharge in their electricity bills. Even if we give all the gas to the power stations we cannot right now meet our demand for electricity. The acute problem with the power sector is the circular debt which if you are able to understand is the inability of WAPDA to pay the cost of fuel required for generating electricity. And a part of this problem lies in the high cost of fuel as well since we generate most of our electricity on imported oil. Believe me some times WAPDA resorts to load shedding while power plants are shut down due to fuel shortage.

Rental power plants were a scam similar to CNG pumps.

WAPDA's problem at this point of time is 1. high cost of electricity (due to skewed fuel mix i.e., less hydel, no gas and more oil based thermal generation,) 2. not enought revenue due to bill defaults, & 3. not enough capacity in transmission and distribution network. The generation capacity comes at no. 4 in this list. Even today there are many power stations which are shut down due to fuel shortage despite load shedding.

1.
Hardly ?
FYI

KAPCO - Oil & Natural Gas
Bin Wasim - Oil & Natural Gas
Jamshoro - Oil & Natural Gas
Guddu - Only Gas
Uch PP - Gas Only

Guddu , Kapco & Bin Qasim are one of the biggest power producers.

1. Circular Debt goes like this

Imported/Local Crude<Refineries <PSO<IPP<KESC/WAPDA<Non Payments by Government agencies and amount owed against subsidiares

PSO owes to refineries, IPPs owe to PSO, Distributors owe to IPPs, Government agencies owes to IPPs

You can see the Dead lock? Usually as soon as the ministry of finance clears a payment to IPPs , it bounces off each of the books to reach PSO and refineries. What PSO is doing these days is importing finished product and not utilizing refineries. They have a 90 payment cycle so basically they pay off for the import after selling the stock in the market.

I hope its clear now.

1. Diverting more gas to the power sector will not solve your power needs. It's just an illusion. Hydel/Coal power is the way to go.

[fahadwizz]

I think you should make your record straight. Now a days there is hardly any power generation on gas. Most of the power generation now a days is on furnance oil and diesel. People will see its effects in coming days when they receive fuel surcharge in their electricity bills. Even if we give all the gas to the power stations we cannot right now meet our demand for electricity. The acute problem with the power sector is the circular debt which if you are able to understand is the inability of WAPDA to pay the cost of fuel required for generating electricity. And a part of this problem lies in the high cost of fuel as well since we generate most of our electricity on imported oil. Believe me some times WAPDA resorts to load shedding while power plants are shut down due to fuel shortage.

Rental power plants were a scam similar to CNG pumps.

WAPDA's problem at this point of time is 1. high cost of electricity (due to skewed fuel mix i.e., less hydel, no gas and more oil based thermal generation,) 2. not enought revenue due to bill defaults, & 3. not enough capacity in transmission and distribution network. The generation capacity comes at no. 4 in this list. Even today there are many power stations which are shut down due to fuel shortage despite load shedding.

I think you should make your record straight. Now a days there is hardly any power generation on gas. Most of the power generation now a days is on furnance oil and diesel. People will see its effects in coming days when they receive fuel surcharge in their electricity bills. Even if we give all the gas to the power stations we cannot right now meet our demand for electricity. The acute problem with the power sector is the circular debt which if you are able to understand is the inability of WAPDA to pay the cost of fuel required for generating electricity. And a part of this problem lies in the high cost of fuel as well since we generate most of our electricity on imported oil. Believe me some times WAPDA resorts to load shedding while power plants are shut down due to fuel shortage.

Rental power plants were a scam similar to CNG pumps.

WAPDA's problem at this point of time is 1. high cost of electricity (due to skewed fuel mix i.e., less hydel, no gas and more oil based thermal generation,) 2. not enought revenue due to bill defaults, & 3. not enough capacity in transmission and distribution network. The generation capacity comes at no. 4 in this list. Even today there are many power stations which are shut down due to fuel shortage despite load shedding.

1.
Hardly ?
FYI

KAPCO - Oil & Natural Gas
Bin Wasim - Oil & Natural Gas
Jamshoro - Oil & Natural Gas
Guddu - Only Gas
Uch PP - Gas Only

Guddu , Kapco & Bin Qasim are one of the biggest power producers.

1. Circular Debt goes like this

Imported/Local Crude<Refineries <PSO<IPP<KESC/WAPDA<Non Payments by Government agencies and amount owed against subsidiares

PSO owes to refineries, IPPs owe to PSO, Distributors owe to IPPs, Government agencies owes to IPPs

You can see the Dead lock? Usually as soon as the ministry of finance clears a payment to IPPs , it bounces off each of the books to reach PSO and refineries. What PSO is doing these days is importing finished product and not utilizing refineries. They have a 90 payment cycle so basically they pay off for the import after selling the stock in the market.

I hope its clear now.

1. Diverting more gas to the power sector will not solve your power needs. It's just an illusion. Hydel/Coal power is the way to go.

[ehalin]

I propose that industry should be provided with all gas, industrialization means prosperity via more jobs, increasing the purchasing power of an ordinary man. After that we will be able to afford the Hi octane even.

I tend to agree with you. I don't foresee any impact on oil import bill either since CNG will substitute oil which is again imported and needs $$$. CNG spared from mis-use in transport sector can be utilized in industry which can either create earnings for common man or for generating electricity which will reduce cost of electricity for common man.

Crux of the matter is that "CNG is in short supply and it should be used where we as a nation have no other alternative." Under present circumstances we have other alternatives for cars which should be utilized and NG should be spared for better things.

And keep in mind fuel/energy/power/gas shortages are pre-cursors to bigger things in the pipeline.

When Hindus migrated from our area (in our area there were no communal riots in 1947) people asked them, "Why are you leaving? You are safe here." And they replied, "We are not leaving for the fear of life or property, but wer are leaving because this area of yours will be a desert in future. There will be sand and sand dunes everywhere. And they were very true. It is a fact that actual cultivated area in some parts of Pakistan has decreased after 1947 and most of the remaining is threatened due to water shortage.

[Xulfiqar]

When I tell someone that CNG is not a good fuel for cars - 95% of users on PW start calling me names like "moron", "nutcase", and in PMs and emails I get "B******od, Ma********od, kafir, murtid, etc etc.

Nice, I believe that this forum has really showed the real colors of holding a CNIC, Thankyou PW users. anyway rant aside.

Please someone explain me this.

What good is a fuel in a machine that is not designed for it, and what good is it when its thermal advantage is put to waste that can be measured in kilotons.

Equipping every tom dick and harry in Pakistan with a CNG car is useless if they cannot even afford its basic repair or even original running cost. That is why I said in every other thread - You have to increase the value of your money, oil, gas etc will become secondary.

[raza1]

You totally missed the basic point of all that i have written above. How do you propose we arrange dollars to import your Hi-Octane. You must understand the difference between the Money in circulation & dollar reserves.

Meray bhai, how are we managing it presently? Industrialization means our local industry will be able produce more which can be exported to bring the gap closer between BOP and BOT, further if we are made available with quality products locally, then our other imports can be reduced which will have positive impact on our reserves. That will ultimately increase the value of our rupee.

U know what, iran is ready to sell us crude at 3 months interest free credit, even at cheaper rates. But we cannot do so, bcaz of amreeka saab bahadur. No bank is ready to open LC for iran.

[fahadwizz]

Again FYI

As i mentioned in my previous post, pso IS currently importing oil at 90days interest free credit.

Sent from my iPhone using Tapatalk

[fahadwizz]

When I tell someone that CNG is not a good fuel for cars - 95% of users on PW start calling me names like "moron", "nutcase", and in PMs and emails I get "B******od, Ma********od, kafir, murtid, etc etc.

Nice, I believe that this forum has really showed the real colors of holding a CNIC, Thankyou PW users. anyway rant aside.

Please someone explain me this.

What good is a fuel in a machine that is not designed for it, and what good is it when its thermal advantage is put to waste that can be measured in kilotons.

Equipping every tom dick and harry in Pakistan with a CNG car is useless if they cannot even afford its basic repair or even original running cost. That is why I said in every other thread - You have to increase the value of your money, oil, gas etc will become secondary.

Again, cng was never introduced to provide relief to the consumer. It was sold cheaper to attract customers.

See the difference?

Motive was to preserve dollars.

Nobody cares about the efficiency, people are ready to convert thier cars to water (see agha waqar). Even though it was a hoax but the desperation among common people made it successful.

We need an alternative, other than oil. Be it a carpool lane, mass transit, iran's gas or lpg. We just cannot afford to import 18bln $ worth of oil.

Sent from my iPhone using Tapatalk

[fahadwizz]

Meray bhai, how are we managing it presently? Industrialization means our local industry will be able produce more which can be exported to bring the gap closer between BOP and BOT, further if we are made available with quality products locally, then our other imports can be reduced which will have positive impact on our reserves. That will ultimately increase the value of our rupee.

U know what, iran is ready to sell us crude at 3 months interest free credit, even at cheaper rates. But we cannot do so, bcaz of amreeka saab bahadur. No bank is ready to open LC for iran.

Don't you know the way we are managing our external accounts right now ? Everyone starts crying when we get into IMF program and taxes like VAT are introduced and subsidies are taken off! Almost the whole industry wants SBP to reduce the discount rate and make credit cheaper.

[fahadwizz]

When I tell someone that CNG is not a good fuel for cars - 95% of users on PW start calling me names like "moron", "nutcase", and in PMs and emails I get "B******od, Ma********od, kafir, murtid, etc etc.

Nice, I believe that this forum has really showed the real colors of holding a CNIC, Thankyou PW users. anyway rant aside.

Please someone explain me this.

What good is a fuel in a machine that is not designed for it, and what good is it when its thermal advantage is put to waste that can be measured in kilotons.

Equipping every tom dick and harry in Pakistan with a CNG car is useless if they cannot even afford its basic repair or even original running cost. That is why I said in every other thread

Xulfiqar - The analysis i have presented is strictly on the basis of economics & finance.

You have to increase the value of your money, oil, gas etc will become secondary.

Over the 65 years , the rupee has only depreciated against all major currencies. Reason ? Simple - We never had enough foreign reserves and have always been dependent upon foreign aid and loans. CNG is a new phenomenon, gas has always been there for the industry but for some reason we could never bring our BOT in positive.