ISLAMABAD: Pakistan’s energy sector is facing a deepening financial crisis, with total circular debt reaching a staggering Rs5.206 trillion, according to the latest report by the International Monetary Fund (IMF).
The report reveals that the gas sector accounts for Rs3.442 trillion of the total debt, while the power sector’s liabilities stand at Rs1.764 trillion. The figures highlight the persistent financial strain on the country’s energy system, which has continued into early 2026.
To address the crisis, the government is implementing a series of reforms under its ongoing IMF programme. These include tariff adjustments and a gradual reduction of untargeted subsidies aimed at improving financial sustainability.
Officials have also decided to convert accumulated energy sector debt into liabilities of the Central Power Purchasing Agency (CPPA) as part of restructuring efforts.
In addition, the government has assured the IMF that it will take stricter measures, including the imposition of additional surcharges on electricity consumers, to ensure repayment of the outstanding debt.
The growing circular debt remains one of the most pressing challenges for Pakistan’s economy, raising concerns about long-term energy security and financial stability.
