ISLAMABAD: The power division on Tuesday said the Ministry of Finance is responsible for a Rs61 billion increase in power sector debt. This debt reached Rs1.675 trillion by June 30 this year. It was Rs1.614 trillion a year before.
“Due to the budget deduction of Rs98bn, the circular debt witnessed an increase of Rs61bn” during FY2025-26, the power division said in a statement.
The power division did not share the end-year report. This report is waiting for statutory approval.
In this way, the power sector circular debt, without including K-Electric, ended the year at Rs1.675 trillion.
The government is working with the International Monetary Fund programme. They have promised not to let the debt flow increase and to slowly reduce the amount of debt. They were able to meet their target by the end of December 2025. The International Monetary Fund was happy about it.
The power division said that they were given Rs893bn for the power sector in the budget for the year 2026.
The money was supposed to help with the power sector. Then Rs98bn was taken away.
The power division said that if they had gotten the amount of money they were supposed to get, the circular debt would have gone down to Rs1.577tr.
When the budget was presented to parliament, it showed that Rs1.036tr was going to be used for power sector subsidies. Then this amount was reduced to Rs893bn when the budget for the year 2027 was presented.
The power division said that they had to cut another Rs98bn because of the austerity policy. This meant that the power sector subsidy was reduced to Rs795bn.
The power division remembered that the circular debt in the power sector had gone down from Rs2.393tr in the year 2024 to Rs1.614tr in the year 2025.
The power division said that the power distribution companies were losing a lot of money. They were losing Rs591bn in the year 2024.. Then they were able to reduce their losses by Rs193bn to Rs397bn in the year 2025.
The power division said that they were able to reduce the losses further during the current year. The losses went down from Rs397bn to Rs326bn.
Over two years, the power division was able to reduce the losses by Rs265bn. The losses went down from Rs591bn to Rs326bn.
The power division said that this shows that the changes they made in the power sector are working.
The numbers show that the power sector is getting better.
The power division said that the budget deduction was a temporary financial issue. It does not mean that the power sector is not doing well.
The power division is committed to making the energy sector financially sustainable and reliable for consumers. They want to ensure the energy sector is stable and secure.
The power division will keep working to make the energy sector better. They will keep making changes to ensure that the energy sector is stable and secure for everyone.
