Govt Cuts Circular Debt by Rs. 780 Billion

The federal government has reduced power sector circular debt by Rs. 780 billion, bringing it down to Rs. 1.614 trillion, according to the Power Division during a NEPRA hearing on fourth-quarter tariff adjustments (QTA) for FY2024–25. The reduction is attributed to lower line losses, higher bill recoveries, and savings from revised IPP contracts. Improved DISCOs’ performance saved Rs. 200 billion, with other interventions covering the rest. However, the government is also raising Rs. 1.275 trillion in fresh bank loans to further reduce debt. No new surcharges would be imposed for repayment. Industrialists warned that the relief is temporary, citing debt clearance through borrowing. NEPRA was informed that consumers may get a Rs. 1.8 per unit refund, totaling Rs. 53.393 billion, including for K-Electric customers. The refund stems from a Rs. 53.7 billion drop in capacity payments and Rs. 662 million in transmission gains, partially offset by Rs. 182 million in maintenance and Rs. 804 million in system fees. Contradictions arose as official data showed a 49 percent rise in industrial consumption, while industries reported shutdowns. The increase was due to industries shifting from captive generation to Discos, despite some power plants and Neelum-Jhelum remaining offline.