ISLAMABAD: The government on Monday informed the National Assembly that circular debt has been reduced to Rs1,614 billion, while a six-year plan has been initiated to eliminate it.
In a written reply submitted by the Ministry of Energy (Power Division) during Question Hour in the National Assembly, the government — which took office in March 2024 — stated that the Circular Debt (CD) stock at that time stood at Rs2,794 billion. To curb the accumulation of CD, several measures were undertaken, including negotiations with power producers to waive Late Payment Interest Charges amounting to Rs 260 billion, reductions in Disco inefficiencies that improved by Rs 193 billion (from Rs. 590 billion in 2024 to Rs. 397 billion in 2025), and improvements in controlled exchange rate, lower KIBOR, and reduced inflation. These efforts collectively helped lower tariffs and decrease mark-up charges on payables contributing to CD. K-Electric also started regular payments. As a result of these combined efforts, CD stock was reduced significantly, bringing the CD for Jun 2025 down to Rs. 1,614 billion—an improvement of Rs780 billion from Jun 2024 (Rs. 2,393 billion).
Furthermore, the government has initiated a CD settlement plan aimed at eliminating CD. The plan involves refinancing the power sector’s interest-bearing payables at more favourable rates: KIBOR minus 0.9%. Currently, these payables carry the following rates: PHL at KIBOR - 0.1% to KIBOR + 0.8%; IPPs (Negotiated) at KIBOR + 1%; and IPPs (Not Negotiated) at KIBOR + 2% to KIBOR + 4.5%.
Under this plan, the CD is targeted to be eliminated within the next six years, supported by parallel reforms to address existing inefficiencies. This initiative will also support the removal of the Debt Servicing surcharge, which is presently charged at Rs. 3.23 per unit to service the mark-up on CD payables. Additionally, the reconstitution of Discos Boards will help further reduce inefficiencies within the distribution companies and support the shift to a Competitive Electricity Market. The government has indicated a transition towards a free and competitive electricity market, moving away from the long-standing single-buyer model under which the state acted as the sole purchaser of electricity. Future power procurement is being structured around competitive bidding and market-based pricing, implemented through the Competitive Trading Bilateral Contractual Market (CTBCM) framework.
While responding to another question, Minister for Petroleum Ali Pervaiz Malik said uninterrupted gas is being supplied to the domestic sector with optimum pressure during cooking hours. Responding to a question during Question Hour in the National Assembly today, he said Sui Companies are ensuring gas supply to their customers from 5:00 in the morning to 10:00 p.m.
The Minister stated that twelve LNG cargoes have been added on the supply side, and with this addition of RLNG into the system, sufficient gas volumes are available to cater to the demand of all sectors. Ali Pervaiz further mentioned that a complaint filing and resolution dashboard is in place to address daily consumer complaints.
Answering another question, Parliamentary Secretary for Communications Gul Asghar Khan said all road infrastructure projects undertaken by the National Highway Authority are planned, designed, and constructed according to international standards. He stated that a ten-year design life is assumed for highway pavements and 50 years for bridges and tunnels. He added that the feasibility of the M-10 Motorway has been nearly completed and that this road will be constructed on a Public-Private Partnership basis. However, he noted that the M-9, the Karachi–Hyderabad link, will continue as an expressway.
