Pakistan’s circular debt rises to Rs2,897 billion

The circular debt of the petroleum sector has risen to Rs2,897 billion, including Rs814 billion interest, the energy ministry informed the National Assembly on Wednesday.

The ministry submitted the financial details during the National Assembly session. It stated that a major portion of the circular debt was related to the gas sector, and attributed the increase to the maintenance of the gas tariff from 2013 to 2023.

Pakistan faces a multitude of energy-related challenges, including frequent power outages, significant transmission losses, reliance on imported fuels, a limited share of renewable energy sources, and a substantial circular debt—a cycle of unpaid government subsidies that accumulates as debt for distribution companies.