LAHORE: The power sector’s circular debt jum­ped to Rs2.65 trillion by the end of May from Rs2.25tr at the beginning of the previous fiscal year — a jump of Rs393 billion, or 18 per cent, in 11 months.

It was in stark contrast with figures of FY22, when the debt fell by Rs27bn, from Rs2.28tr at the start of the year to Rs2.25tr by the close, data from the energy ministry’s Power Division showed.

According to a docum­ent, the total payables to the power sector stood at 1.35tr, followed by Rs101bn to generation companies (Gencos) and Rs800bn as Pakistan Holding Limi­ted (PHL) debt in the fiscal year 2021-22.

However, fiscal 2023 saw a massive surge in the payables to power produ­cers, as it jumped to Rs1.77tr, whereas payables to Gencos increased to Rs110bn. However, the PHL debt dropped to Rs765bn.

In FY22, the budgeted but unreleased subsidies were reduced by Rs12bn, but they were increased to Rs72bn in the first 11 months (July to May) of 2022-23. Similarly, the unbudgeted or unclaimed subsidies were reduced by Rs133bn in the fiscal year 2022 but were rais­­ed by Rs34bn in July-May.

The independent po­­w­er producers’ (IPPs) inte­rest charges on delayed payment increased to Rs105bn in 2021-22 but dropped to Rs87bn by the end of May.

The markup paid on the IPPs’ claims by the PHL, which surged to Rs29bn in 2021-22, further jumped to Rs58bn. The pending generation cost — quarterly tariff adjustments (QTA) and fuel charge adjustments (FCA) — fell from Rs414bn to Rs171bn in the 11-month period.

The dues pending on the part of K-Electric fell from Rs107bn to Rs57bn, and the power distribution companies’ (Discos) losses due to inefficiency fell from Rs133bn to Rs125bn.

Published in Dawn, July 5th, 2023