Federal Minister for Energy Awais Ahmad Khan Leghari clarified that no new surcharge would be imposed on power consumers to settle the Rs 2400 billion circular debt.
His remarks came a day after reports emerged on certain sections of local media, claiming the government, during technical talks with the International Monetary Fund (IMF), proposed about Rs2.83 per unit additional financial surcharge on electricity for the next five years to get rid of the power division circular debt.
Speaking on Geo News programme Naya Pakistan, the energy minister said that there was “a lot of room in debt servicing surcharge of Rs2.83” that the government is currently charging from power consumers.
He said that the power division had improved its efficiency, adding that they were “feeling secure” and saving amounts due to the lower interest rates. “We will get rid of the circular debt within the next five to six years.”
“We have taken the IMF on board [about the matter]. They are our development partners.”
The minister categorically announced: “We will not add any burden on our consumers in any way.”
He slammed the former PTI government for adding Rs1,580 billion in the circular debt during its tenure and claimed that the previous PDM and the current governments kept the circular debt “almost flat”.
Responding to a question, the minister said that the total circular debt currently stood at around Rs2400bn, adding that a certain part of the loan had to be paid to the government’s plants.
“We would not borrow from banks for such loans,” he said, adding that the government saved Rs460 billion after discussion with IPPs under revised agreements and provided relief to the people.
The minister said that they were negotiating with commercial banks to borrow Rs1200bn to settle the remaining circular debt.
