Circular Debt Surges to Rs 40 billion in Only 3 Weeks

The circular debt has increased to rupees forty billion in just the first three weeks of the present caretaker government, reaching nearly around rupees five hundred and fifty billion.

The circular debt was at rupees five hundred and seven billion on the 31st of May, which was the last day of the previous government, however, it grew to rupees forty billion to rupees five hundred and forty-seven billion in June as was revealed by the Hub Power Company CEO—Khalid Mansoor while he was briefing the special committee of the Senate on circular debt.

The committee which met Senator Shibli Faraz had a discussion on the debts assembled, load-shedding and electricity theft. The CEO of Hubco informed that the former Pakistan Muslim League-Nawaz government had paid rupees two hundred billion, however, after that no payments were paid for reducing the circular debt.

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He indicated that more than thirty percent of electricity was being produced from the furnace oil in Pakistan, which was the reason for the country’s power tariff to be the highest of the region.

He also revealed that owing to the transmission losses, Hubco had to bear a yearly loss of rupees one hundred and thirty billion, adding an average price of electricity in Pakistan of rupees thirteen per unit as compared to only rupees seven per unit in India.

Senator Jamal Deeni was of the opinions that the demand of electricity had remained the same throughput the year, however, the province of Balochistan was getting the minimum electricity and that has destroyed the industries in the province.

The officials of the Power Division informed the committee that they had an integrated plan as per which less efficient power producing plants would be closed down in phases.

Nepra has already annulled the licenses of power plants in Multan, Shahdara and Faisalabad.

Faraz pointed that power sector’s debt had gone beyond rupees one trillion, which includes the debt parked in a holding firm and if the practises would not be changed the economy would suffer badly. The CEO of Pakistan Electric Power Company said that for ending the circular debt improvement is needed in governance.

Aftab Butt—the CEO of Kot Addu Power Company gave a suggestion that instead of giving subsidy to the lifeline consumers, the government should provide them electricity from alternative sources.

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