Pakistan’s power sector circular debt soars to Rs 2.63tn

Author: inp

The circular debt of Pakistan’s power sector has soared to Rs 2,635 billion till January 2024, says in media reports.

According to a report released by the power division, the hike in circular debt continued despite the massive increase in power tariffs and fuel adjustments.

The circular debt increase was recorded at Rs2,310 billion till June 2023, showing an increase of Rs325 billion during the seven months (January 24).

The report stated that poor performance and low recoveries by the DISCOs added to the increase in the circular debt. The International Monetary Fund (IMF) has ‘asked’ Pakistan to curtail circular debt of the power sector and increase electricity and gas prices for the fresh loan programme. It is to be noted that the Pakistani government gave assurance to the International Monetary Fund (IMF) on maintaining the power sector’s circular debt at Rs2.31 trillion. The Power Division presented the details before the Senate Standing Committee for Power. In a briefing, the Power Division officials said that the circular debt stood at Rs2.31 trillion by June 2023 which would be maintained.

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