Pakistan’s state-owned enterprises (SOEs) continue to exert significant pressure on public finances, with total accumulated losses reaching Rs6.5 trillion. Annual losses have increased by Rs700 billion to Rs900 billion, reflecting ongoing operational inefficiencies and governance challenges, according to a Ministry of Finance report. Despite some profitable entities, the overall performance of government-owned companies weakened in fiscal year 2024–25, underscoring structural and fiscal vulnerabilities.
The report shows that combined profits of the top 15 SOEs fell 5% year-on-year to Rs622 billion, down Rs30 billion compared with the previous fiscal year. Only one company reported earnings exceeding Rs100 billion, signaling a concentration of profitability in a small number of firms. Among profit-makers, Oil and Gas Development Company Limited remained the top earner with Rs170 billion, although this represented a 19% decline from the previous year. Pakistan Petroleum Limited earned Rs90 billion, down 22%, while National Bank of Pakistan posted Rs57 billion in profit, up 106%.
The oil and gas sector’s collective profits dropped by roughly one-fourth to Rs366 billion. The Ministry of Finance attributed the decline to receivables tied to circular debt, price normalization, and the impact of tax demands imposed by the Federal Board of Revenue. Other notable contributors included the Water and Power Development Authority with Rs52 billion, Government Holding Private Limited at Rs49 billion, Karachi Port Trust with Rs35.3 billion, and Port Qasim Authority at Rs35 billion. Pak-Arab Refinery Company reported Rs22 billion in earnings, down 60%, while Pakistan National Shipping Corporation posted Rs20.5 billion.
Despite these pockets of profitability, the aggregate earnings of all government-owned enterprises fell 13% year-on-year to Rs710 billion, reflecting mounting cost pressures and delayed adjustments to tariffs. Daily losses across SOEs are estimated at approximately Rs3 billion, translating into over Rs1 trillion annually, further emphasizing the fiscal burden of these enterprises.
The report, prepared by the Ministry of Finance and approved by the Cabinet Committee on State-Owned Enterprises, has not yet been formally released. It highlights governance weaknesses across public sector companies, including incomplete boards, limited accountability, and underperforming audit and risk committees. The Central Monitoring Unit noted that board effectiveness and oversight quality are not systematically assessed, resulting in weak decision-making and strategic inefficiencies.
Less than 36% of SOEs completed audits on time, causing delays in financial reporting and reliance on estimated figures rather than verified accounts. Inconsistent reporting of key performance indicators and risk exposures has undermined valuation credibility and increased fiscal risk. The net financial position of SOEs indicates continued erosion of value, with losses outpacing earnings despite a substantial asset base. SOE assets declined by 1% to Rs38 trillion during FY25, highlighting persistent exposure of public finances to the operational performance of these enterprises.
As Pakistan navigates economic and fiscal challenges, improving governance, audit compliance, and strategic oversight of SOEs remains critical. Analysts argue that addressing these weaknesses could enhance profitability, reduce fiscal risk, and enable the government to leverage the asset base of its state-owned enterprises more effectively.
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