Govt Plans to Exit Power Purchase Business And Eliminate Circular Debt

Energy Minister Awais Leghari on Monday announced that the government will stop buying electricity directly from producers and eliminate its entire circular debt in six years. Speaking at the joint economic briefing on Monday, Leghari said power prices had already been reduced by Rs. 10.5 per unit, including a Rs. 16 per unit cut for industries. The government has also lowered electric vehicle charging tariffs from Rs. 71 to Rs. 39 per unit, he claimed. Leghari said circular debt, which had reached Rs. 1.2 trillion would be eliminated within six years without burdening consumers. He explained that in the past year alone, improved governance and reduced losses in distribution companies helped cut circular debt by Rs. 700 billion and company losses by Rs. 193 billion. Automation across the power sector is planned within three years, covering meters, transformers, and prepaid consumer systems. The minister said recent reforms saved hundreds of billions of rupees, and renegotiations with independent power producers (IPPs) have protected consumers from an additional Rs. 3.6 trillion burden. He said auctioning loss-making plants alone had generated Rs. 48 billion and saved Rs. 7 billion in annual costs, while professional boards had been established to improve performance.