Circular debt jumps by Rs364b

According to The Express Tribune, the June 2026 circular debt report shows the power sector's debt climbed by Rs364 billion during fiscal 2025-26. That increase was Rs319 billion, or 709%, above the preceding year's figure. The Power Division has not yet formally issued the one-page document online.

The rise stemmed from inefficiencies, lower bill recoveries by distribution firms, and disagreements over payments to K-Electric, despite Rs302 billion in subsidies. Non-payments by K-Electric alone added Rs194 billion. The company is not paying for electricity amid a disagreement with NEPRA over when a multi-year tariff will be finalised.

The government has started privatising three profitable distribution companies: Faisalabad, Gujranwala and Islamabad. Express Tribune noted that the sale would not curb losses that mostly sit with other entities. Separately, the IMF had permitted Rs400 billion of additions to circular debt but asked the government to reduce that to zero using budget subsidies.