Pakistan Circular Debt Pakistan: Shehbaz Sharif govt to face growing challenge of circular debt
Islamabad: Pakistan's new government, which is led by Prime Minister Shehbaz Sharif, will continue to face the worsening circular debt in the energy chain sector, media reports said.
Officials said the government will still continue to face the challenge of dealing with the rising crude oil prices in the global market following the Russia-Ukraine war.
At present, energy companies are facing financial constraints and are struggling to get their outstanding dues cleared.
Oil and gas sectors are reeling from Rs 1.6 trillion worth of circular debt whereas the power sector has a circular debt close to Rs 2.5 trillion, officials told The Express Tribune.
When the Pakistan Muslim League-Nawaz (PML-N) government left office in 2018, the circular debt of power sector had been calculated at Rs 1.6 trillion.
The PML-N administration started a pilot liquefied natural gas (LNG) supply project, which put Pakistan on the global LNG map.
The rising gas demand forced the Pakistan Tehreek-e-Insaf (PTI) government, which ran the country from August 2018 to early April 2022, to divert expensive LNG to the residential consumers in winter, the newspaper reported.
However, there was no mechanism in place to recover dues from the domestic sector.
Now, LNG has become a major contributor to the circular debt, leading to deterioration in the financial health of Pakistan State Oil (PSO) and Sui Northern Gas Pipelines Limited (SNGPL).
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