ISLAMABAD – Pakistan’s power sector circular debt rose by Rs79 billion in the first quarter (July–September) of the current fiscal year, reaching Rs1.693 trillion, according to a quarterly report by the Power Division. The increase comes despite government efforts to curb debt accumulation through capital injections and improved recovery mechanisms.
The report showed that payables to power producers climbed to Rs944 billion by the end of September, compared to Rs861 billion at the start of the fiscal year. Although the total stock of circular debt stood significantly lower than Rs2.467 trillion recorded during the same period last year, inefficiencies and weak bill recoveries by power distribution companies (Discos) continued to drive the increase.
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The Power Division attributed the Rs79 billion rise to operational inefficiencies and seasonal factors, noting that the figure was close to last year’s Rs73 billion increase during the same period. It said the finance ministry had released Rs19 billion in subsidies this quarter, compared to Rs28 billion in unreleased subsidies last year. The report also highlighted Rs229 billion in outstanding receivables from K-Electric, including Rs187 billion in markup.
A spokesperson for the Power Division emphasized that the quarterly rise should not be interpreted as a renewed upward trend, stressing that circular debt was actually reduced by Rs780 billion during the previous fiscal year. “The current increase is linked to seasonal and operational factors that are expected to reverse over the course of the year,” the statement said.
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The report also pointed out some progress in curbing losses, with Disco inefficiencies reduced to Rs171 billion this year from Rs239 billion in the same period last year, underscoring the government’s ongoing efforts to strengthen financial discipline in the energy sector.