Additionally, the gas sector circular debt also surged over Rs3 trillion, bringing the total unfinanced debt to Rs5.73 trillion. The total energy sector circular debt now equals 5.4% of the size of Pakistan’s economy, as the wrong policies of ending the circular debt through price increases have failed to yield the desired results. Energy Minister Mohammad Ali has now proposed a plan to reduce the energy sector circular debt by Rs1.268 trillion or 22% of the stock. Read Gas circular debt set to soar by Rs275bThe circular debt has made the power and gas sector companies unviable and is now affecting the country’s lending options. China has now linked the approval of a $600 million commercial loan with the settlement of the Rs400 billion circular debt.

Source: The Express Tribune January 16, 2024 15:38 UTC