Pakistan's energy sector circular debt rising by Rs 38 billion per month
Feb 02, 2022
Islamabad [Pakistan], February 2 : Pakistan's energy sector circular debt flow is still soaring with an average growth of about Rs 38 billion per month recorded during the first six months (July-December) 2021-22.
Total circular debt has reached Rs 2.476 trillion during the first six months of the current fiscal year as compared to Rs 2.303 trillion in the same period of 2020-21, with total growth of Rs 196 billion as compared to Rs 152 billion during July-December 2020-21, as noted by Business Recorder.
Circular debt is a persistent headache for the Pakistan government and sends an unpleasant message to the International Financial Institutions and local banks is a product of incompetence, unbridled theft, high losses, rampant corruption and other factors, according to Business Recorder.
Power sectors' average Transmission and Distribution losses are 17 per cent against targets of 13.4 per cent.
However, Power Division is determined to bring circular debt down to Rs 1.880 trillion at the end of the current fiscal year.
Unpaid subsidies have been reduced by Rs 8 billion during the first six months of the current fiscal year against a growth of Rs 77 billion in the same period last year. The volume of unbudgeted subsidy was Rs 17 billion during this period from negative Rs 5 billion in the same period last fiscal year, according to sources.
The Independent Power Procedure interest charges on delayed payments increased to 67 billion July-December 2021-22, against Rs42 billion in the comparable period of the year before, posting a growth of over 60 per cent.
The amount of Distribution company (Disco) inefficiency was recorded at Rs 46 billion from Rs 8 billion during this period last year, showing an increase of 475 per cent, according to Business Recorder.
The sources maintained that Discos under-recoveries recorded at 66 billion during July-December 2021-22 as compared to negative 37 billion. However, prior year recovery has declined to Rs 8 billion from 99 billion, as noted by Business Recorder.
