KARACHI: Economic & Financial Analyst Ateeq Ur Rehman has said that Pakistan has highly taxed electricity consumers in the region and emphasized the need that relief by the government on electricity tariff will reduce extreme financial hardships faced by human lives in the country.

The government should identify and rectify the defects and go for a solution for stopping the circular debt to further pile up and abstain from passing on this burden to consumers or common men, said Ateeq.

Power sector's circular debt has reached up-to Rs. 2380 billion by April 2021. For payment of circular debt, IMF has allowed 10% provision in budget to be included as "circular debt surcharge", whereas the Finance Minister Shaukat Tareen has suggested reducing it by growing demand of electricity through industrial growth in 6 to 7 years.

Ateeq Ur Rehman said sustaining a time bomb for 6 to 7 years is not appropriate, it will not only include heavy interest added to countries annual debt servicing repayments but also the ever increasing burden of debt. The causes of growth of circular debt includes mismanagement in electricity transmission and distribution, production of expensive thermal electricity by furnace oil, substandard power plants, heavy receivables, non payments to oil companies by power plants. This has created a capacity annual surcharge payment by the government amounting to Rs 455 billion to power plants out of which 40% are the government power plants. This is a serious matter, he added.

Copyright Business Recorder, 2021