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Tuesday, 24 January, 2023 I 1 Rajab, 1444 Mobile policy attracts 36 companies to manufacture smartphones in the country
SBP offers stop-gap solution to importers for clearance goods held at port
SNGPL reduces gas losses by 23,348 MMCF in three years
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Rs 40.00 | Vol XIII No 206 I 44 Pages I Islamabad Edition Imran Khan unveils mass protest plan to resist Naqvi’s appointment
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‘WORST POWER SHUTDOWN’
Ministry fails to Meet Power restoration deadline ISLAMABAD ahmad ahmadani & aSad Ullah KamRan
P
aKiSTan experienced a massive power outage early Monday due to a failure in its national electricity grid. Power was out in all of the country’s major cities, including Karachi, islamabad, Lahore, and Peshawar, confirmed the energy ministry. Though Minister for Power Khurram Dastgir Khan gave a deadline of 10pm for full restoration of power supply, the authorities failed to meet the deadline and most cities and towns of the country remained without power in a cold winter night. Though the power restoration process started in the federal capital around 7:34pm after a 12-hour-shutdown, other cities of the country were still facing a complete blackout by midnight. The ministry in a statement, said that the grid “experienced a loss of frequency that caused a major breakdown,” at around 07:30 am local time, and that work was underway to restore the system. in an interview, the minister of energy Khurram Dastagir explained what happened. “in winter, the demand for electricity reduces nationwide, hence, as an economic measure, we temporarily
close down our power generation systems at night.” But when the power plants were restarted on the morning of January 23, “frequency variation and voltage fluctuation,” were discovered in southern Pakistan, “somewhere between Dadu and Jamshoro,” he said. Consequently, this led to the “power generating units to shut down one by one.” What is frequency? When you turn on an appliance, such as your kettle or laptop charger, it
is powered by alternating current. This indicates that the electricity alternates between positive and negative voltage. This back-and-forth motion, or “oscillation,” is referred to as electrical frequency. Grid frequency, measured in Hertz (Hz), is a technical term that refers to the number of times the alternation cycle occurs every second. Currently, 50 Hz is the most prevalent frequency used in the bulk of the world’s power systems, including Pakistan’s.
Because the equipment in your house, factory, or office is designed to run at 50 Hz within a narrow tolerance, maintaining the frequency of our power supply is critical. This is the reason why everyone turns their appliances off when there’s a fluctuation in the voltage or frequency of electricity. if this isn’t done there’s a possibility of equipment and appliances being damaged. The issue is that frequency can be difficult to control; if the exact amount of electricity needed is not matched by generation, the frequency of the electricity on the grid can be affected. if there is more demand for electricity than supply, for example, frequency will reduce. When there is an excess of supply, frequency rises. To make matters even more complicated, the margin of error is extremely narrow. What happens when frequency drops? While talking to Profit sources from the power division explained that, “as per initial findings, the issue surfaced around 07:34 am due to disruption in the frequency of the national grid which caused a major breakdown.” The sources further elaborated that, “the frequency was reduced due to a fault in Guddu-Quetta transmission line while other reasons and issues behind the fault are being determined.” The frequency reduces if we feed in
MPC hikes policy rate to 17% g
TarGETinG inFLaTion ExPECTaTionS anD PriCE STaBiLiTy STaTED aS THE KEy rEaSonS. PaKiSTan BECoMES CounTry WiTH 13TH HiGHEST inTErEST raTE in THE WorLD ShAhnAwAz ALI
The State Bank of Pakistan (SBP) in a much anticipated MPC meeting has raised the policy rate by 100 basis points. The effective policy (target) rate now stands at 17%, which is its highest level in over 25 years. With this latest development, Pakistan now stands as the country with the 13th highest interest rate in the world, with only countries of the likes of iran, Sudan, Sierra Leone, ukraine, argentina and Zimbabwe ahead of it. The decision was prompted by higher than expected inflation rates and inflation expectation. Deciphering the Monetary Policy Statement The monetary policy statement stated that inflationary pressures have been on the rising trend, despite a tight monetary policy. The inflationary pressure is stated as “broad-based” and “persistent”, and it is deemed critical to anchor this pressure or long-term sustainable growth. The statement added that “short-term costs of bringing down inflation are lower than the long-term
costs of allowing it to become entrenched”. The MPC statement noted that core inflation had still been on a rising trend. This means that non-food, non-energy
inflation, that has little to no relation to exogenous shocks, and should have otherwise stayed within the target could still not be tamed at the 16% mark. The statement also took note of
PM forms high-level committee on major power breakdown ISLAMABAD Staff RepoRt
Prime Minister Shehbaz Sharif on Monday, taking strong notice of the major breakdown of electricity across the country, set up a high-level committee to find out the cause. The prime minister also sought urgent report from Federal Minister for Energy Engineer Khurram Dastagir on the matter. He emphasized for finding the pitfalls that led to the electricity breakdown and stressed fixing the responsibility. Shehbaz Sharif ordered swift measures to restore electricity, saying that inconvenience to the general public would not be tolerated. too little to meet demand. To avoid power outages, the automatic load shedding strategy is activated when this occurs. This is due to the fact that if the frequency falls too low, the power plants shut down one by one until the grid completely fails.
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assessment of the external sector, also states that the “effective implementation of energy conservation measures and appropriate pricing of petroleum products is critical for much-needed reduction in energy imports”. The statement regards the 60% reduction in CaD over December, a result of tight policy and another factor that the statement refers to as, “administrative measures”. However, “the MPC (also) views that the completion of the pending 9th review under the iMF’s EFF (to be) critical for reducing uncertainty and unlocking multilateral and bilateral inflows.) The MPC also states that “the current fiscal stance is inconsistent with monetary tightening”. The statement points out that the FBr tax collection grew slower than the budget target. With a medium term inflation target of 5-7% for December 2024, the MPC aims to control the inflation expectations. a feat that is increasingly difficult to achieve where the December 2022 CPi inflation was recorded at over 24%.
the fact that the inflation outlook was also on the rise causing the risk of more inflation. The committee also stated that, “the global economic and financial conditions broadly remain uncertain in the near-to-short term”, and an expected economic slowdown and fall in the global demand could mean even worse circumstances for exporters. The MPC statement, on its outlook of the real sector notes that the “downside risks on the SBP’s growth outlook for this year have increased” owing to shutting down of various production cuts and supply IN TODAY S ISSUE chain constraints faced by the industries. This means that the low growth rate target set by the state bank might end up being lower than anticipated. The MPC has noted moderate economic activity in response to policy tightening, and “exogenous shocks” like the floods. The MPC statement, in its
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