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The Power Division has denied claims of a fresh surge in Pakistan’s circular debt, clarifying that the reported increase of Rs. 79 billion during the first quarter of FY2025-26 is part of a routine seasonal adjustment, not a renewed upward trend.
Responding to media reports, the spokesperson for the Power Division stated that the figures have been misinterpreted and must be viewed in context. During the same period last year, circular debt had risen by Rs. 73 billion, yet by the end of the fiscal year, the government successfully reduced the overall stock by Rs. 780 billion, demonstrating sustained fiscal discipline.
The spokesperson emphasized,
“These temporary fluctuations are operational and seasonal in nature. They do not indicate any structural deterioration and are expected to reverse in the coming months.”
He further noted that Distribution Companies (DISCOs) showed improved efficiency between July and September 2025, reducing financial losses by Rs. 67 billion compared to the same period last year a reflection of the government’s ongoing reforms to enhance performance and curb inefficiencies.
The official assured that the current adjustments would not affect consumer tariffs, as pricing remains determined through the regular regulatory process.
This clarification comes as part of the government’s broader effort to maintain financial stability in the energy sector and uphold its commitment to managing circular debt responsibly.
