Pakistan’s combined circular debt in the power and gas sectors has exceeded Rs. 5.3 trillion, highlighting the growing financial challenges facing the country’s energy industry. Figures presented before the National Assembly show that the combined outstanding burden reached Rs. 5,306 billion by June 30, 2026.
According to information shared by the Power Division and Petroleum Division, the power sector’s circular debt stood at Rs. 1,675 billion, while the gas sector’s liabilities reached Rs. 3,631 billion. The figures reflect continued financial pressure across Pakistan’s electricity and gas supply chains.
The latest data also shows that debt has increased in both sectors over the past year, although the scale of the increase differs significantly between electricity and gas.
Pakistan’s power sector circular debt rose to Rs. 1,675 billion by the end of June 2026, compared with Rs. 1,641 billion at the close of fiscal year 2024-25. This represents an increase of Rs. 34 billion in one year, according to details provided by the Power Division to the National Assembly.
Officials attributed the increase mainly to outstanding payments for electricity supplied from the national grid to K-Electric. A case concerning the recovery of these dues remains pending in court, the Power Division informed lawmakers.
To address the financial burden, the government has ended its take-and-pay agreements with independent power producers (IPPs) and introduced a hybrid take-and-pay model. The change forms part of efforts to manage electricity-sector costs and address issues affecting the accumulation of circular debt.
However, the financial challenges extend beyond outstanding payments between electricity suppliers and other entities. The Assembly was also informed that 15 villages in Dera Ismail Khan remain without electricity.
A project to provide electricity to these villages has been prepared for the current fiscal year. Its completion, however, depends on the release of funds and the availability of the necessary equipment.
The situation highlights the connection between financial management and the delivery of essential energy services. While authorities work to address outstanding liabilities, funding availability also remains important for expanding electricity access to underserved communities.
The gas sector has recorded a substantially larger circular debt burden. According to the Petroleum Division, gas-sector debt increased by Rs. 344 billion over the past year, rising from Rs. 3,288 billion on June 30, 2025, to Rs. 3,631 billion on June 30, 2026.
Of the total gas-sector circular debt, Rs. 1,783 billion consists of late-payment surcharges. These additional liabilities contribute to the overall financial pressure facing the gas industry.
The figures indicate that the gas sector accounts for the larger share of Pakistan’s combined power and gas circular debt. Addressing the issue will require authorities to examine outstanding payments, financial obligations, and the factors contributing to the accumulation of liabilities.
Alongside the debt figures, the Petroleum Division also provided updated information about Pakistan’s hydrocarbon reserves and production. The country’s total recoverable gas reserves were reported at 68,803 billion cubic feet, with 48,140 billion cubic feet currently being produced, according to the figures presented.
Recoverable oil reserves were estimated at 1,378 million barrels, while crude oil production was reported at 1,102 million barrels. These figures provide additional context about the country’s domestic energy resources as policymakers address financial challenges across the sector.
Pakistan’s growing circular debt remains an important issue for energy-sector management, public finances, and the reliability of electricity and gas services. The latest figures presented to the National Assembly underline the scale of the outstanding liabilities and the importance of measures aimed at improving payment recovery and financial sustainability.