Power sector’s circular debt rises to Rs2.635trn

Power producers owe Rs1.760 trillion by Discos while gencos’ payables to fuel suppliers stand at Rs 111 billion

Pakistan’s power sector circular debt has increased by Rs 9 billion during the first seven months of the current fiscal year, reaching Rs 2.635 trillion. 

The circular debt, which refers to the amount owed by power distribution companies (Discos) to power producers and fuel suppliers, has been a persistent challenge for the country’s energy sector and economy.

An official document revealed that the total payables to the power producers stood at Rs 1.760 trillion, followed by Rs 111 billion to generation companies (Gencos) payables to fuel suppliers, and Rs 765 billion as the amount parked in Pakistan Holding Limited (PHL).

The document also showed that the independent power producers (IPPs) interest charges on delayed payment were Rs 72 billion during the period, a drop from Rs 99 billion during the same period of the previous year.

The pending generation cost, which is made up of quarterly tariff adjustments (QTA) and fuel charge adjustments (FCA), increased to Rs 214 billion from Rs 139 billion.

The dues pending on the part of K-Electric, the sole power utility in Karachi, fell from Rs 102 billion to negative Rs 11 billion.

However, Discos’ losses due to inefficiency rose to Rs 86 billion from Rs 69 billion, and their recoveries increased to Rs 198 billion from Rs 170 billion.

The amount of other adjustments, such as prior year recovery, declined to Rs 116 billion from Rs 210 billion.

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