By Muhammad Soban ISLAMABAD, Feb. 24 (INP-WealthPK): Blockchain technology can help Pakistan contain rising energy sector circular debt by curbing power theft, line losses and ensuring efficiency and transparency in transmission and distribution systems. Blockchain is the latest technology primarily in use in the financial sector. It has the potential to change the way humans conduct transactions. It is a decentralised electronic ledger system that consists of a series of blocks that have the characteristics of being secure, transparent and immutable. Like other sectors, the energy sector can greatly benefit from blockchain technology. Pakistan has been mired in power sector circular debt over the last decade due to mismanagement, line losses, inefficiency, energy theft, etc. Pakistan’s circular debt currently stands at Rs2.7 trillion. The circular debt has adverse effects on the economy. To narrow down the debt, the government has to frequently resort to tariff hikes. This surge in prices increases the cost of production which leads to inflation. Furthermore, it also hurts Pakistani exports by making them expensive in the international market. To overcome these challenges Pakistan can benefit from blockchain technology in the energy sector. Globally, energy companies are considering blockchain as a promising tool for recording and facilitating transactions between consumers and energy suppliers. Pakistan can benefit by using this peer-to-peer system to overcome the problem of line losses and theft and develop a transparent system. Moreover, through blockchain, excess renewable energy can be sold to other participants of the network by utilising an automated smart contract management system. Pakistan’s energy sector has also struggled with the problem of recovery. According to a report of National Electric Power Regulatory Authority (Nepra), though almost all the electricity distribution companies have low recovery rates, the Quetta Electric Supply Company has the lowest recovery rate of 39.8%. In this scenario, blockchain technology can prove handy to ensure a 100% recovery. Besides, through blockchain, the government can introduce the concept of pay-as-go, where pre-paid electricity meters can be used. This will bring an improvement in recovery. Outdated and traditional methods are used to collect data in the energy sector, which are often inaccurate. Blockchain technology can help collect data from producers to consumers with cent per cent accuracy and transparency. These transparent processes and immutable records can dramatically enhance auditing and regulatory compliance practices in the energy sector. Blockchain technology can also help the government develop a better management system to keep an eye on the supply and demand situation of oil products. The technology can provide real-time data of demand and supply situation and help the government maintain stocks and make arrangements to meet future demand.