Without allowing an upward revision in electricity and gas tariffs, the government on Saturday directed relevant authorities to come up with a viable plan to reduce the monster of circular debt that has now peaked Rs 4 trillion.
Under the plan, government is reportedly considering coming up with alternate plans such as parking the amount of circular debt into separate Special Purpose Vehicle, directing gas utilities to declare their dividends and utilise them for financing and investing Terms Finance Certificates into Investment Bonds.
The circular debt is haunting our energy sector for a long time now and we believe no serious effort was made in the past to address it.
Indeed out of box solutions such as being envisaged by the government are need of the hour to reduce the burden of circular debt.
Reforms are of immense importance in the energy sector for economic growth of the country and financial sustainability of energy sector.
While there is dire need to check leakages and pilferage, focus should also be shifted to exploiting indigenous resources to produce cheap energy.
The government has come up with a programme to generate ten thousand megawatts of electricity through solar energy. This must be pursued more vigorously to ensure its implementation at the earliest.
Simultaneously, more renewable projects need to be introduced keeping in view future requirements.
Cheap energy is a must not only to provide relief to domestic consumers but also for industries in order to make our export oriented products competitive in international market.