The Power Division on Tuesday blamed the Ministry of Finance a Rs. 61 billion increase to the power sector circular debt, noting its budget had been reduced by Rs. 98 billion during the last fiscal year.
In a statement, the Power Division noted the circular debt had risen to Rs. 1.675 trillion in the last fiscal year, compared to Rs. 1.614 trillion the year prior. It recalled that the federal budget had allocated Rs. 893 billion for the power sector in FY26, adding this was subsequently slashed by Rs. 98 billion.
“Had the power sector received the full allocated budgetary payment, the circular debt would have further reduced to Rs. 1.577 trillion,” it said.
According to the statement, the power sector’s circular debt decreased from Rs. 2.393 trillion in FY24 to Rs. 1.614 trillion in FY25. Losses of power distribution companies alone declined from Rs. 591 billion in FY24 to Rs. 397 billion in FY25.
“During the current fiscal year, the power division has further reduced these losses from Rs. 397 billion to Rs. 326 billion,” it said, adding that over the past two years, overall losses were curtailed by Rs. 265 billion, bringing them down from Rs. 591 billion to Rs. 326 billion.
“This reduction clearly demonstrates that the reforms implemented in the power sector are proving effective and yielding sustained positive outcomes,” it said, adding the numbers confirmed the reform process within the energy sector was progressing effectively.
The division maintained the budget deduction was merely a temporary financial factor rather than a reflection of any operational decline. It said it remained committed to executing its reform agenda to ensure that the energy sector became financially sustainable and reliable for consumers.