ISLAMABAD: The All Pakistan Business Forum (APBF) President Syed Maaz Mahmood has warned the government of worsening circular debt in the power sector, which would continue to haunt it along with the challenge of dealing with the volitile crude oil prices in the global market. Syed Maaz Mahmood said that the power sector circular debt issue should be resolved holistically without escalating electricity cost, as its size has more than doubled during the three and a half years in spite of raising the power tariff multiple times in the past. At present, oil and gas sectors are reeling from Rs1.7 trillion worth of circular debt whereas the power sector has a circular debt close to Rs2.5 trillion. The rising gas demand forced the previous government to divert expensive LNG to the residential consumers in winter. However, there was no mechanism in place to recover dues from the domestic sector. APBF Chairman Ibrahim Qureshi said that LNG has now become a major contributor to the circular debt, leading to deterioration in the financial health of Pakistan State Oil and Sui Northern Gas Pipelines Limited. PSO has to receive over Rs360 billion from SNGPL on account of LNG supplies whereas SNGPL has to recover around Rs120 billion from the domestic sector, industry players say. News Desk
