Pakistan’s circular debt in the power sector stood at Rs. 1.66 trillion in July 2025, showing a sharp decline of 29.3% from Rs. 2.35 trillion in the same month a year earlier, data from Arif Habib Limited (AHL) showed.
On a monthly basis, however, the debt stock inched up by 2.9%.
The largest share of the debt was linked to power producers, with payables amounting to Rs. 908 billion. This represented a 5.5% increase from June but a steep 41.8% drop compared with Rs. 1.56 trillion in July 2024.
Payables of government-owned GENCOs to fuel suppliers were recorded at Rs. 93 billion, down 13.1% from last year. Debt parked under Power Holding Limited (PHL) remained at Rs660 billion, unchanged from June but 3.4% lower on an annual basis.
The breakdown further showed that unreleased budgeted subsidies added Rs. 35 billion to the stock in July, up from Rs. 28 billion in June. Distribution company (DISCO) losses and inefficiencies contributed Rs. 41 billion, while under-recoveries added another Rs. 46 billion. Prior year recoveries and adjustments, however, reduced the burden by Rs. 72 billion.
Generation cost adjustments, including quarterly tariff and fuel charges, cut another Rs. 6 billion from the debt during the month. Meanwhile, non-payment from K-Electric stood at Rs. 3 billion.
Overall, the net monthly addition to circular debt in July was Rs. 47 billion, according to AHL’s data.
