Power sector circular debt reaches Rs 270bn

KARACHI: The power sector circular debt has touched Rs 270 billion amid high-cost electricity generation by independent power producers (IPPs) and worsening load-shedding situation, ARY News reported Sunday.

As soon the Pakistan Muslim League-Nawaz (PML-N) government took to power, it claimed of paying around Rs 480 billion under circular debt. But the issue has resurfaced amid rising circular debt.

In last 330 days, the circular debt has also touched Rs 330 billion, suggesting increase of Rs 1 billion per day.

Decrease in bill collection ratio and damages incurred through line losses have also contributed to the circular debt.

IPPs are churning out 100-kw electricity by using 24-kg furnace oil in the country, while internationally only 14-kg of furnace oil is used to generate 100-kv of electricity.

It indicates government has failed to reduce electricity generation cost.

Senior expert on economics, Dr. Farukh Saleem said the issue of circular debt will be solved by reducing the rate of electricity acquired through IPPs, instead of supplying power to consumers on higher rates.