Pakistan's power sector circular debt rose by Rs34 billion in a year, reaching Rs1,675 billion by June 30, 2026, and officials told the National Assembly that unpaid electricity bills from K-Electric were the main reason. The Power Division briefed lawmakers on the figures, which show the sector's debt up from Rs1,641 billion at the close of fiscal year 2024-25. Circular debt is money left unpaid along the energy chain, so when one link does not pay, the shortfall moves down the line to others. The same briefing put the combined power and gas burden at Rs5,306 billion, above the Rs5 trillion mark.
K-Electric dues drive most of the rise
The Power Division said the increase came mainly from electricity supplied from the national grid to K-Electric, which the company has not paid for. A case to recover these dues is pending in court, so the money has not yet been recovered. K-Electric is the private utility that supplies electricity to Karachi. The briefing did not state the total amount of K-Electric's unpaid dues, so its exact share of the Rs1,675 billion cannot be worked out.
Gas sector debt rises more sharply
The Petroleum Division reported separately that gas sector circular debt rose by Rs344 billion over the same year, reaching Rs3,631 billion on June 30, 2026, up from Rs3,288 billion a year earlier. Officials said that figure includes Rs1,783 billion in late-payment surcharges, which are penalties on overdue bills. Adding both sectors gives the combined Rs5,306 billion total. The Petroleum Division also gave updated reserve numbers, with recoverable natural gas reserves at 68,803 billion cubic feet, of which 48,140 billion cubic feet is currently being produced.
Government steps and what comes next
To slow the build-up, the government has ended its take-and-pay agreements with independent power producers, which are private companies that sell electricity to the grid. In their place it has introduced a hybrid take-and-pay model, officials said. The Assembly was also told that 15 villages in Dera Ismail Khan still have no electricity. A supply project for them has been prepared for the current fiscal year, but its completion depends on the release of funds and the availability of equipment.
The next steps are the court case over K-Electric's dues and the funding for the Dera Ismail Khan project, and neither has a stated completion date.
Aasan alfaaz mein
Bijli ke shobay ka circular debt ab Rs1,675 billion ho gaya hai, jo ek saal mein Rs34 billion barh gaya. Power Division ke mutabiq is izafay ki buniyadi wajah K-Electric ke unpaid bills hain, aur in dues ka case abhi court mein pending hai. Gas sector ka qarz bhi Rs3,631 billion tak pahunch gaya hai. Is ka asar aakhir kar bijli ki supply aur sarkari faislon par pad sakta hai.
