Pakistan's power sector circular debt rises to Rs1.675 trillion, gas sector liabilities reach Rs3.631 trillion

Profit reported that Pakistan's power sector circular debt rose by Rs34 billion in FY2025-26, reaching Rs1.675 trillion at the end of June 2026. Over the same year, gas sector liabilities grew by Rs344 billion to Rs3.631 trillion, based on information the Power and Petroleum Divisions gave the National Assembly. The power sector figure had stood at Rs1.641 trillion a year earlier.

The Power Division attributed most of the increase to dues for electricity delivered to K-Electric through the national grid. Recovering those payments depends on an unresolved tariff dispute involving the company that is before a court, and a decision is expected. The government has also introduced measures such as changes to IPP contracts, including a hybrid take-and-pay model, and a six-year Rs1.225 trillion facility from commercial banks.

The Petroleum Division separately reported recoverable gas reserves of 68,803 billion cubic feet (BCF) against production of 48,140 BCF. Recoverable oil reserves were put at 1,378 million barrels, compared with crude output of 1,102 million barrels. Accumulated late payment surcharges account for Rs1.783 trillion of the gas sector's outstanding liabilities.