Going In Circles

Abstract

There are certain misconceptions about the power sector’s circular debt, which has generated controversy in the country. Contrary to various official claims, circular debt in power sector cannot be resolved on a permanent basis unless we take some radical measures. Initially, we need to change our energy mix to reduce dependency on oil-based electricity, and take stern actions to stop electricity theft. Pakistan’s energy mix of electricity is highly skewed and dependent on thermal generation (oil and gas). According to official estimates, 36 per cent of our electricity is produced from oil, another 36pc from hydel, around 25pc from gas and only 3pc from nuclear. This reflects that the cost of electricity would increase with an increase in global oil prices.