Govt Faces Rs. 1 Trillion Shortfall in Electricity Sales and Purchases This Year

The federal government faces a substantial shortfall of over Rs. 1,075 billion in electricity purchases and sales this financial year, sources told ProPakistani. To curb the impact of this shortfall, authorities aim to collect Rs. 275 billion from electricity consumers through rebasing. Meanwhile, an extra Rs. 228 billion subsidy would be provided to keep tabs on the circular debt burden. Distribution companies (DISCOs) continue to show high losses at 18.3 percent, which surpasses the National Electric Power Regulatory Authority’s (NEPRA) target of 11.4 percent. Sources said the International Monetary Fund (IMF) is on board with timely rebasing efforts, and discussions are underway to finalize a circular debt management plan, which will require approval from both the federal cabinet and the lender itself. Improved recoveries, specifically through reducing DISCO losses, could add Rs. 66 billion to revenue, while an allocated Rs. 358 billion subsidy will go to Independent Power Producers (IPPs) and government power plants. Current revolving circular levels are expected to reach Rs. 2,430 billion by the end of this fiscal year, a Rs. 140 billion increase over the past two years. Sources further revealed that efforts to minimize DISCO losses are underway, with a target of reducing them to 17.3 percent and a goal of achieving a 90 percent recovery rate by 2024-25. Sources said losses of IESCO will be brought down to 7.8 percent, 14.5 percent for LESCO, GEPCO 11.8 percent, and PESCO 35.7 percent. Enhanced coordination among institutions is also planned to support the effective implementation of the circular debt management strategy.