ISLAMABAD: Pakistan’s power sector circular debt has soared to Rs2.635 trillion in the first seven months of the fiscal year 2023-24, compared to Rs2.626 trillion during the same period in 2022-23.
According to official documents, the total payables to power producers amounted to Rs1.760 trillion, with Rs111 billion owed by generation companies (Gencos) to fuel suppliers, and Rs765 billion parked in Pakistan Holding Limited (PHL) for the fiscal year 2023-24. The unclaimed subsidies were eliminated in the fiscal year 2023-24.
During the seven months of 2023-24, independent power producers (IPPs) incurred interest charges of Rs72 billion on delayed payments, a decrease from Rs99 billion in the same period of 2022-23. Pending generation costs, including quarterly tariff adjustments (QTA) and fuel charge adjustments (FCA), rose to Rs214 billion in July-January 2023-24 from Rs139 billion in the corresponding period of 2022-23. The dues owed by K-Electric decreased from Rs102 billion to negative Rs11 billion.
However, losses due to inefficiencies in power distribution companies (Discos) increased to Rs86 billion during the first seven months of 2023-24, compared to Rs69 billion in 2022-23. Discos’ under-recoveries also surged to Rs198 billion during July-January 2023-24 from Rs117 billion in 2022-23.
Other adjustments (prior year recoveries, etc.) decreased to Rs116 billion from Rs210 billion during the same period last year.
Payables to power producers increased by Rs5 billion due to a withdrawal by the Federal Board of Revenue (FBR) in April 2023, while Rs336.9 billion is receivable from K-Electric as of January 2024.
Story by Mushtaq Ghumman
