The government cautions that in the absence of further budgetary subsidies, the circular debt in the power sector might soar to a new high of Rs2.8 trillion by the end of the current fiscal year, despite a 51% hike in energy prices in July.
Even with the recent pricing hikes, sources from the Ministry of Energy told The Express Tribune that the circular debt is predicted to rise by Rs417 billion in the fiscal year 2024–2025.
The amount of circular debt as of June of this year was Rs2.383 trillion, exceeding the restrictions set by the federal cabinet under the Circular Debt Management Plan for 2023–24 as well as promises made to the International Monetary Fund (IMF).
