Energy sector circular debt has climbed to Rs5,286 billion, with the International Monetary Fund (IMF) warning that persistent financial strain in the sector poses a risk to the overall fiscal stability.
According to sources, the gas sector accounts for the larger share of the total, with circular debt reaching Rs3,611 billion, while the power sector recorded Rs1,675 billion. The gas sectors contribution to the overall figure remains significantly higher than that of the power sector.
The IMF said the energy sector continues to face financial pressure and called for accelerated reforms to restore stability. The fund stressed that timely tariff adjustments are essential to prevent further accumulation of circular debt, alongside efforts to reduce losses and improve sector performance.
Reducing the flow of circular debt in the power sector remains a key challenge for Pakistan, the IMF noted, while also urging continued cost-based tariff adjustments in the gas sector. The fund reiterated that structural weaknesses in the energy sector threaten the broader financial stability.
The government has pledged to further reduce the power sector circular debt flow during the current fiscal year. The IMF said the overarching goal of the reforms is to cut losses and place both the electricity and gas sectors on a financially sustainable footing.
