KARACHI: Chairman of National Business Group Pakistan and President Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain has said power sector circular debt has become a threat to the economy.
It has increased rapidly to Rs2.5 trillion and the only way to resolve the issue is to compromise political interests, he said.
Mian Zahid Hussain said that all the steps taken to reduce the debt over the last several years have not reduced the debt, but rather increased burden on people and the business community. He said that circular debt was a major threat to the energy security of the country. He said that very serious attempt was made to eradicate it.
He noted that hundreds of billions of rupees of electricity theft is being ignored, huge losses are being incurred during distribution and transmission of electricity while instead of recovering billions of rupees from defaulters, the burden is being shifted on the consumers.
He said that all measures including new agreements with IPPs, adjustment in electricity tariff, increase in electricity tariff, and amendment in NEPRA Act have not yielded any result, as the government has not adopted any clear policy in this regard during last three years.
He noted that unless a clear strategy is adopted, the infamous circular debt will continue to shake the foundations of the economy.
Mian Zahid Hussain further said that apart from electricity, the situation in the gas sector is also worrisome. The circular debt of state-owned gas companies has exceeded Rs670 billion. The debt of SNGPL is Rs400 billion while Sui Southern is stuck in debt of Rs270 billion while the government has also increased the gas tariff for the industry that is generating its own electricity which is affecting both production and exports.
The reason for the increase in gas tariff is the untimely purchase of LNG by the government, and now we are paying nineteen and twenty dollars per MMBtu, which has put an unnecessary burden of billions of rupees on the national exchequer.
Those who damaged the energy sector have not been taken to the task by authorities, but masses are being punished for the blunders of bureaucracy, he said, adding that gas scarcity is hitting masses and the industrial sector across the country.
Copyright Business Recorder, 2021