Circular debt keeps rising despite massive power tariff hike

Despite an over 50 per cent hike in power tariff involving Rs1.2 trillion additional burden on consumers, the government on Tuesday conceded that circular debt was continuously going up due to missed targets on recovery and losses. While pleading its case at a public hearing for adding Rs43.34bn financial burden (Rs2.18 per unit) to the consumers in three months, Power Division told National Electric Power Regulatory Authority (Nepra) that circular debt that stood at Rs2.253tr by end of September last year had now reached Rs2.437tr, showing an increase of Rs185bn. Nepra Chairman Tauseef H. Farooqui said the impact of Rs43.34bn demanded by the Power Division under quarterly tariff adjustment (QTA) for the July-September period would translate into Rs2.18 per unit additional charge for all ex-Wapda Distribution Companies (Discos) for three months. Under the mechanism, he said, this has to be charged to consumers in three coming months — January to March.