The federal government has informed the International Monetary Fund (IMF) that it expects circular debt to increase by Rs. 150 billion to reach Rs. 2.5 trillion by the end of the current fiscal year, Energy Ministry sources told ProPakistani.
This massive jump in power sector debt violates the pre-determined targets set by the lender last year to keep it controlled at Rs. 2.31 trillion.
The Energy Ministry sources said the lender has expressed serious concerns about the spike in circular debt and the lack of effective control measures to offset the increase. IMF has requested a detailed plan from the ministry to prevent further increases in the debt. This plan should include proposals for tariff adjustments to manage the circular debt in the gas sector as well.
The IMF has also demanded that the Ministry of Energy share its strategy for increasing power and gas tariffs next fiscal year, sources added.
Source: Pro Pakistani