Islamabad January 16 2025: According to the latest data released by the Ministry of Power, Pakistan’s power sector circular debt decreased by PKR 12 billion in the first four months of the fiscal year 2025, reaching PKR 2,381 billion without any payment from fiscal reserves.
“Our program will keep energy tariffs in line with costs while we implement fundamental reforms to ease price pressures and shore up viability over the medium term” writes IMF in its First Review an Extended Arrangement under the Extended Fund Facility.
Of this PKR 2,381 billion, PKR 1,608 billion is payable to power producers, PKR 90 billion is owed by GENCOs to fuel suppliers, and PKR 683 billion is parked in PHL.
The majority of the debt decrease is due to a PKR 31 billion decrease in pending generation costs, including quarterly and fuel cost adjustments, and a PKR 134 billion recovery from Prior Year Adjustments in electricity bills.
Interest charges on PHL contributed an additional PKR 70 billion to the circular debt from July to November 2024.
The low recovery rate has added PKR 76 billion to the circular debt during July to November which is much less than last year increase of PKR 153 billion in the same period. Higher T&D losses reflect inefficiencies and outdated infrastructure cause increase of PKR 94 billion during the same period.
