Federal Minister for Energy Sardar Awais Ahmed Khan Leghari on Sunday strongly rebutted observations of the National Electric Power Regulatory Authority’s (NEPRA) State of Industry Report 2025, terming several conclusions “factually incorrect” and asserting that deep-rooted power sector reforms have already delivered tangible relief to consumers while putting the sector on a sustainable path.
Addressing a press conference, the minister said NEPRA’s report was based on insufficient and outdated data, leading to confusion and misperceptions. He said the report should have been released in August 2025, and its delayed publication failed to present the true picture of the power sector or acknowledge the government’s achievement of key targets.
The minister said the government has made it possible to fully service existing debt through the debt service surcharge, adding that the circular debt will be completely eliminated within the next five to six years. He said the government’s six-year circular debt settlement plan is firmly on track.
Responding to NEPRA’s assertion that Pakistan has around 8,700 megawatts of surplus electricity capacity, Leghari said while surplus capacity does exist, it was incorrect to suggest that the government had not reviewed “take-or-pay” and “must-run” power plant contracts. He said extensive negotiations were held with Independent Power Producers (IPPs), resulting in the termination or revision of several contracts and the closure of inefficient plants, easing the burden on consumers by saving billions of rupees.
The minister said the government, for the first time, took merit-based decisions and cancelled nearly 8,000 megawatts of expensive future power projects, including 7,967 megawatts identified purely on merit. These decisions, he said, eliminated unnecessary surplus power and saved consumers an estimated $17 billion in future costs.
Sardar Awais Leghari said that due to non-payments by K-Electric up to June 2023, circular debt increased by Rs 640 billion, while more than Rs 300 billion remains outstanding against K-Electric as of November 30, 2025. He added that KE was given comparatively relaxed regulatory targets and has received over Rs 600 billion in subsidies over the past five years, placing an additional burden on the national exchequer.
Awais Leghari rejected NEPRA’s claim regarding Rs780 billion reduction in circular debt, terming the information misleading. He clarified that the reduction includes Rs193 billion due to lower DISCO losses, Rs260 billion achieved through successful negotiations with Independent Power Producers (IPPs), and around Rs300 billion resulting from improvements in macroeconomic indicators.
“All these figures were formally shared with NEPRA; therefore, its apparent ignorance is surprising,” he said.
The minister said circular debt, which once stood at Rs 2.4 trillion, has been reduced to Rs 1.6 trillion within a year, marking the first significant decline in many years. “Circular debt has not increased; it has reduced by Rs 780 billion, and further reduction is underway,” he said.
Highlighting recovery improvements, Sardar Awais Leghari said DISCO recoveries increased from 92.4 percent to 96.6 percent during FY2025, while the recovery gap shrank from Rs 315 billion to Rs 132 billion, reflecting a reduction of Rs 183 billion. He added that recovery performance continued to improve during the first six months of FY2026, with an additional Rs 43 billion increase compared to the same period last year.
He said an effective mechanism has been introduced for recoveries from government departments, with 25 percent collections now being ensured through the federal adjuster against verified bills. He reaffirmed the government’s commitment to gradually reducing inefficiencies within DISCOs.
He said NEPRA’s observations regarding smart meters, meter reading, and billing were incomplete, noting that consumers now have the right to submit their own meter readings, a reform aimed at transparency and consumer empowerment.
The minister said national average electricity tariff declined from Rs 53.04 per unit in March 2024 to Rs 42.27 per unit in December 2025, reflecting the impact of sustained reforms. He said the government remains conscious of reduced electricity demand, attributing it to economic factors and a shift by consumers toward alternative energy sources.