There will be additional losses of Rs535 billion in the electricity sector during the fiscal year.
Islamabad:
Pakistan has informed the International Monetary Fund (IMF) that there will be additional losses of Rs535 billion in the power sector during the current fiscal year, which is 35 percent more than last year.
The main reasons for these losses are low collection of electricity bills and line losses, while the government has refused to accept the IMF's target of Rs 200 billion to reduce circular debt.
According to sources, the Power Division has told the IMF that the circular debt will increase by Rs505 billion in the current fiscal year, while the IMF wants this increase to be limited to Rs200 billion.
The Power Division clarified that there is no significant scope for reducing line losses and improving bill collections.
According to the data, a loss of Rs 260 billion is expected due to low collection of electricity bills alone, which is 97 percent more than last year. There will be another loss of Rs 276 billion due to shortcomings in the performance of power companies.
The IMF wondered if the power sector performed relatively well during July and August, why could the targets not be achieved for the rest of the year?
It should be remembered that losses in these two months were limited to Rs. 153 billion, which was 37 percent less than last year.
Thanks to budget subsidies and some other measures taken by the government, the total volume of circular debt has been reduced from Rs 2.42 trillion to Rs 1.6 trillion by June, which has been appreciated by the IMF.
However, no comprehensive and sustainable solution has yet been found to prevent its flow in the future. A spokesperson for the Power Division declined to comment on the news.
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