Power Sector’s Circular Debt Declines By Rs. 336 Billion

The power sector circular debt declined by Rs. 336 billion to Rs. 2,310 billion in June 2023 compared to a rise of Rs. 15 billion in the previous month.

During the fiscal year 2022-23 (FY23), the stock of circular debt increased by Rs. 57 billion compared to a decrease of Rs. 27 billion in the same period last year.

Payables to power producers increased by Rs. 83 billion during FY23 and reached Rs. 1,434 billion from Rs. 1,351 billion during the same period last year. Likewise, Power Generation Companies’ (GENCOs) payables to fuel suppliers increased by Rs. 10 billion during FY23 as compared to SPLY.

During the full year, the Power Generation Companies (GENCOs) payable to fuel suppliers was Rs. 111 billion. Conversely, the amount parked in Power Holding Limited (PHL) has been reduced by Rs. 35 billion during FY23 from Rs. 800 billion last year to Rs. 765 billion in June.

The government added Rs. 100 billion to circular debt on account of IPPs interest charges on delayed payments. The pending generation cost (QTAs and FCAs) added Rs. 250 billion in FY23.

Despite the Rs. 57 billion additions in circular debt since FY22, it is noteworthy that the increase of Rs. 396 billion due to losses inefficiencies by power distribution companies and under recovery of bills was compensated by big decreases in Other Adjustments (prior recoveries) to the tune of Rs. 447 billion.

Moreover, payments through fiscal space (principal repayments to PHL and stock payments) posted a decrease of Rs. 162 billion during 2022-23.

  • When you want to misguide the general public and the readers, spread out a web of figures, which are beyond their comprehension. There is no comprehensible explanation for how this happened. Was there no electricity theft during that month? Were employees of various DISCOs not provided free electricity at that time? Were there no defaulters during that period? When all these luxuries were in place at that time, how can the circular debt decline.

    A few days ago there was some noise about free use of electricity by some in this country, the mafia and trade unions choked those voices. Merely a crackdown on electricity thieves is not enough, the government must end those unreasonable and abnormal practices. When the law enforcers themselves are the beneficiaries of such concessions, how can there be any improvement in system?

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