Shafaqna Pakistan: The power sector’s circular debt stood at Rs1.675 trillion by June 2026, the National Assembly was informed on Friday.
In a written response to a question from lawmaker Dr Shazia Sobia Aslam Soomro, Energy Minister for Power Division Sardar Awais Ahmad Khan Leghari said the outstanding circular debt amounted to Rs1,675 billion at the end of June.
The minister explained that circular debt was treated as a consolidated liability of the power sector rather than being calculated separately for individual distribution companies (Discos). As a result, the government did not provide a Disco-wise breakdown of the debt.
Leghari said the government had introduced several measures to contain the buildup of circular debt, including implementation of the Circular Debt Management Plan (CDMP).
Under the plan, the government is also refinancing high-cost debt with lower-cost financing through a six-year financing arrangement under the Circular Debt Settlement Plan. The move, according to the minister, is aimed at reducing financing costs as well as the stock of receivables from Discos. The government has also strengthened monitoring of Disco performance by imposing strict targets for loss reduction, recoveries and operational efficiency, accompanied by enhanced accountability. The timely release of government subsidies to Discos, aimed at preventing further accumulation of circular debt.
In a written reply to another question of MNA Asif Khan, the Petroleum Division presented the details of the petroleum levy from July 1 to August 20, 2026 that stated the government has gradually increased the petroleum levy on petrol and diesel to Rs80 per litre, restoring the levy to the level envisaged under the federal budget for the current fiscal year. According to the written reply submitted by Minister for Energy (Petroleum Division) Ali Pervaiz Malik in the National Assembly, the levy on petrol stood at Rs66.64 per litre on July 1 and was raised to Rs80 per litre by August 20, marking an increase of Rs13.36 per litre. The levy on diesel, however, followed a different trajectory and it stood at Rs79.54 per litre on July 1 but was reduced to Rs70.82 on July 11 before being gradually increased to Rs80 per litre by August 20.
The Petroleum Division said the levy had initially been reduced to provide relief to consumers amid exceptional volatility in international oil markets. It was subsequently restored in phases in line with the target approved in the federal budget.
The government has set a petroleum levy collection target of Rs1,676 billion for the current fiscal year and the target is based on an average petroleum levy of Rs80 per litre on petrol and diesel.
Source: The News
