The Power Division has officially reported that the national circular debt stock reached 1,837 billion rupees as of February 2026. While this figure represents an increase since June 2025, officials have clarified that the surge is a temporary phenomenon driven primarily by timing differences in payments and receipts. According to a statement issued by the division, the debt flow remains within the prescribed targets established under the Circular Debt Management Plan. The government expects these seasonal and monthly fluctuations to be fully reconciled by the close of the current fiscal year, ensuring that the broader financial targets remain on track without impacting the general consumer.
A significant highlight of the latest performance review is the marked improvement in the operational efficiency of Distribution Companies. Between July 2025 and February 2026, financial losses attributed to DISCO inefficiencies declined by 48 billion rupees compared to the same period in the previous year. This turnaround is being credited to enhanced governance, strengthened financial discipline, and a rigorous crackdown on technical and administrative lapses across the power sector. The Power Division spokesperson emphasized that these improvements are a testament to the ongoing structural reforms aimed at stabilizing the country’s energy infrastructure.
The government has also maintained a firm stance on the power sector budget, which remains unchanged at 893 billion rupees. Officials clarified that no additional supplementary grants have been sanctioned, despite the reported debt figures. While the targets for reducing Transmission and Distribution losses for June 2027 are still under review and have yet to be finalized, the current focus remains on maintaining the existing budgetary framework. This fiscal restraint is seen as a crucial component of the broader strategy to demonstrate to international lenders and domestic stakeholders that the power sector is moving toward self-sustainability.
Regarding the payment of Independent Power Producers, the Power Division reiterated that all settlements, including those for projects under the China-Pakistan Economic Corridor, are being processed routinely from the central pool. These payments are made strictly in accordance with individual entitlements, with the government explicitly denying any preferential treatment to specific producers. This transparent payment mechanism is part of a comprehensive six-year Circular Debt Settlement Plan. The ultimate goal of this long-term strategy is the complete elimination of circular debt by addressing root inefficiencies rather than relying on further increases in electricity tariffs.
Despite the positive outlook shared by the Power Division, the transparency of the data remained a point of contention during a recent public hearing at the National Electric Power Regulatory Authority. When questioned by industry observers and media representatives, some officials initially suggested that the circular debt figures were not yet final. However, the subsequent clarification from the Power Division has aimed to settle these uncertainties by providing a clear snapshot of the debt stock and the progress made in reducing systemic losses. As the government continues to refine its reform agenda, the focus will remain on ensuring the long-term financial viability of the power grid through sustained operational discipline.
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