Pakistan’s circular debt has increased by Rs.177bn to Rs2,327tn at the end of June-2021. This is the record highest level of Circular Debt in the Energy Sector of Pakistan. In last fiscal year circular debt stood at Rs1.612tn.

Circular debt has increased by Rs1.179 trillion since FY2018 where it stood at Rs1.148 trillion.

The rise in Circular Debt remain worrisome as despite significant tariff increases, shut down of several old independent power plants (IPPs), fuel conversions to cheaper fuels, tax rationalisations and timely subsidy payments Circular Debt of Energy sector remain on higher side.

Government has put ambitious plans of containing Circular Debt to the extent of over Rs. 2 trillion in two years.

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