ISLAMABAD:The Power Division has rejected claims that the Rs79 billion increase in circular debt during the first quarter of FY2025–26 signals a renewed upward trend, stressing that the rise is seasonal and does not undermine the government’s commitment to contain debt accumulation.
A spokesperson for the division said the Q1 increase should be viewed in full context. During the same period last year, circular debt had risen by Rs73 billion, but by the end of FY2024–25 the overall stock had actually declined by Rs780 billion. The spokesperson noted that the current increase reflects temporary operational and seasonal factors, which are expected to reverse over the remainder of the fiscal year.
According to the Power Division, distribution company (DISCO) inefficiencies were cut by Rs67 billion during July–September 2025 compared with the same quarter of the previous year. This, it said, highlights the government’s continuing focus on improving operational performance, reducing losses, and enforcing financial discipline in the power sector.
The spokesperson clarified that these interim fluctuations in circular debt have no impact on consumer electricity tariffs, which continue to be determined independently through the regular regulatory process. The Power Division reaffirmed that the government remains committed to sustaining the downward trajectory of circular debt and ensuring sectoral reforms align with IMF-supported fiscal and energy targets.
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