Energy Sector Reforms Reduce Circular Debt, Distribution Losses

Islamabad: The Power Division says ongoing reforms in the energy sector have significantly reduced circular debt and distribution losses, reflecting sustained progress toward financial stability.

According to Radio Pakistan, a spokesperson for the Power Division stated that circular debt declined from 2393 billion rupees in financial year 2023-24 to 1614 billion rupees in the financial year 2024-25, reflecting a reduction of 779 billion rupees.

The spokesperson mentioned that the federal budget for the last financial year had allocated 893 billion rupees for the power sector, but a subsequent reduction of 98 billion rupees limited the budgetary support, causing the circular debt to increase by 61 billion rupees during the current fiscal year.

The spokesperson clarified that this budget reduction was a temporary financial constraint rather than an indication of any operational setback.

Addressing the losses of Power Distribution Companies (DISCOs), the spokesperson highlighted that over a two-year period, the Power Division has successfully curtailed overall losses by 265 billion rupees, reducing them from 591 billion rupees to 326 billion rupees.

The spokesperson noted that these improvements demonstrate that the government’s power sector reforms are delivering positive and sustainable results.

Reaffirming the government’s commitment to reforms, the spokesperson emphasized that efforts will continue to ensure a financially sustainable, efficient, and reliable power sector for consumers.