Despite a hefty hike of up to 112 percent in gas prices during its tenure, the government of Pakistan Democratic Movement (PDM) was unable to stop the accumulation of circular debt and had added Rs533 billion to it in its first 15 months.
In three years from June 2020 till June 2023, the gas sector circular debt had increased by Rs940 billion from Rs1144 billion to Rs 2084 billion, official documents available with The Nation reveal.
According to the documents, the PDM government had accumulated circular debt much faster than in the PTI government. The PTI government in its last 21 months (June 2020-March 2022) had added Rs 407 billion to the circular debt, while the PDM government in its first 15 months (April 2022-June 2023) had added Rs 533 billion to the gas sector circular debt, the documents reveal.
From June 2020 to June 2021, the PTI government had added Rs 128 billion to the gas sector circular debt, whereas from July 2021 till March 2022 had added Rs 279 billion to it.
The PDM government on the other hand had added Rs 72 billion at the rate of Rs 24 billion per month to the circular debt in three months from April 2022 to June 2022. During the fiscal year 2022-23 (July 2022 to June 2023), the PDM government had added recorded Rs 461 billion or Rs 38.42 billion per month to the circular debt, the data reveals.
The gas circular debt was Rs 1144 billion in June 2020, which had reached Rs 2084 billion in June 2023, the documents added. It is worth noting here that in February 2023, the PDM government increased the natural gas tariff by up to 112 percent for domestic, general industries, including export-oriented sectors, captive power plants, CNG and IPPs, and commercial sectors. Following into the footsteps of the PDM government, the caretaker government has also increased the gas tariff by up to 193 percent, effective from November 1,2023, for various categories of consumers and claimed that the increase will stop the accumulation of circular debt.