Energy ministry informs NA that government efforts have cut circular debt by Rs9 billion over the past six months.

Key Points: Pakistan’s Circular Debt Decline & Energy Sector Reforms

1. Circular Debt Reduction
   • The Energy Ministry reported a Rs9 billion decline in circular debt in the first half of FY 2023-24.
   • Debt decreased from Rs2,393 billion (June 2024) to Rs2,384 billion (December 2024).
   • The government attributed this improvement to recovery efforts by power distribution companies (Discos).
2. Strategic Roadmap (2025-2029)
   • Energy Audits: Computerized audits of distribution transformers to detect power losses.
   • Smart Metering: Advanced metering infrastructure for real-time monitoring of electricity theft.
   • Meter Installation: Mandatory meters for all consumers to curb unauthorized usage.
   • Crackdown on Defaulters: Recovery actions under the Land Revenue Act; contractors deployed in high-theft areas.
   • Solarization of Tube Wells: To reduce reliance on grid electricity.
   • Arrears Recovery Scheme: Local administrations and Discos to collect pending dues.
3. Electricity Subsidy Approved
   • Nepra approved a Rs1.71/unit subsidy for all Discos (including K-Electric) from April to June 2024.
   • Rs58.6 billion subsidy funded by a Rs10/litre petroleum levy (imposed in March 2024).
   • No base tariff reduction, but adjustments may fluctuate based on interest and exchange rates.

Pakistan’s Energy Ministry claims a Rs9 billion reduction in circular debt, crediting improved Disco recoveries and anti-theft measures. The government’s 2025-2029 strategy focuses on smart metering, audits, and solarization to curb losses. Meanwhile, a temporary Rs1.71/unit subsidy (funded by fuel levies) offers short-term relief, though long-term tariff stability remains uncertain.