The power sector circular debt increased by Rs. 378 billion to Rs. 2,631 billion during the first 10 months (July-April) of the fiscal year 2022-23 (FY23) as compared to increase of Rs. 169 billion in the same period of the previous year.
As per the official documents seen by ProPakistani, payables to power producers increased by Rs. 244 billion during 10MFY23 and reached Rs. 1,767 billion from Rs. 1,523 billion during the same period last year. Likewise, Power Generation Companies’ (GENCOs) payables to fuel suppliers increased by Rs. 11 billion during July-April FY23 as compared to the same months of the previous fiscal year.
During 10MFY22, the Power Generation Companies (GENCOs) payable to fuel suppliers was Rs. 88 billion, which has come up to Rs. 99 billion in 10MFY23. Conversely, the amount parked in Power Holding Limited (PHL) has been reduced by Rs. 73 billion during the first 10 months of FY23 from Rs. 838 billion last year to Rs. 765 billion in July-April FY23.
As per the document, the government projects the circular debt to be reduced to Rs. 2,374 billion, and payment to power producers to remain at the existing level of Rs. 1,509 billion by fiscal year-end.
Likewise, the government expects GENCOs’ payables to fuel suppliers to remain at Rs. 100 billion. The amount parked in Power Holding Limited (PHL) is also estimated to stay the same at Rs. 765 billion, the documents maintained.
Of the Rs. 378 billion additions in circular debt since FY22, an increase of Rs. 297 billion was because of inefficiency and losses by power distribution companies and under recovery of bills. The government added Rs. 76 billion to circular debt on account of IPPs interest charges on delayed payments. The under-recovery of bills added Rs. 204 billion to the circular debt during July-April FY23.
An amount of Rs. 501 billion is pending from K-Electric as on April 2023 due to a subsidy dispute between the power company and the Government of Pakistan.
It’s sad the people of Pakistan will pay this in form of Tariff Adjustment charges, and the people who are incompetent at stopping line losses, and the people who are stealing electricity will live happily ever after.