Punjab’s government-owned Bhikki power plant is seeking high-speed diesel supplies, with electricity generation costs potentially reaching Rs. 74 per unit at prevailing diesel prices.
The Punjab government is exploring the procurement of high-speed diesel (HSD) for its 1,180-megawatt Bhikki power plant in Sheikhupura, raising questions about the potential cost of electricity generation if the facility operates using diesel instead of its regular fuel.
Quaid-e-Azam Thermal Power (Private) Limited (QATPL), the government-owned company responsible for operating the facility, has invited oil marketing companies (OMCs) to participate in a prequalification process for supplying high-speed diesel to the power plant.
According to the company’s tender notice, the procurement process aims to identify eligible suppliers capable of providing diesel for the facility’s operational requirements.
The development comes as fuel prices remain an important factor in Pakistan’s electricity generation costs. Based on the prevailing diesel price, electricity produced through high-speed diesel at the Bhikki plant could cost approximately Rs. 74 per unit.
Such a generation cost would have significant implications for the economics of operating the facility, particularly when compared with electricity produced through other available fuels.
Bhikki is a major power generation project in Punjab, with an installed capacity of 1,180 megawatts. The facility was developed to strengthen the country’s electricity supply and support growing energy demand.
The plant is designed to operate on regasified liquefied natural gas (RLNG), making fuel availability and procurement costs important considerations for its operations.
The latest tender notice indicates that QATPL is preparing an alternative fuel supply arrangement by seeking qualified diesel suppliers. However, the prequalification process alone does not confirm that the plant will immediately begin commercial electricity generation using diesel.
Oil marketing companies interested in supplying high-speed diesel will need to meet the requirements outlined by the company during the procurement process.
The potential cost of Rs. 74 per unit highlights the financial difference that fuel selection can make in Pakistan’s power sector. Electricity generation costs depend on several factors, including fuel prices, plant efficiency, operating conditions and other associated expenses.
If diesel is used for power generation, the resulting electricity cost could be considerably higher than generation through relatively cheaper fuel sources, depending on prevailing market conditions.
Pakistan’s energy sector continues to face challenges involving fuel availability, imported energy costs and the financial burden of maintaining a reliable electricity supply. Power producers must balance operational requirements with the cost of different energy sources.
For consumers, higher generation costs can also raise concerns about electricity tariffs and the broader financial impact on the power sector. However, the estimated Rs. 74 per-unit generation cost should not be confused with the final electricity tariff charged to consumers, which includes additional components and adjustments.
The Bhikki diesel procurement initiative therefore places renewed attention on fuel management and the financial challenges associated with electricity production in Pakistan. The outcome of the tender process and any subsequent decision regarding diesel-based operations will determine how the proposed arrangement affects the plant’s operations.