The circular debt in Pakistan’s petroleum sector has surged to Rs2,897 billion, including Rs814 billion in interest, as revealed by the energy ministry to the National Assembly on Wednesday.
In a financial report submitted during the session, the ministry highlighted that a significant portion of this debt is tied to the gas sector. The rise in circular debt was attributed to the unchanged gas tariff from 2013 to 2023.
Pakistan continues to grapple with various energy challenges, such as frequent power outages, high transmission losses, dependence on imported fuels, a limited use of renewable energy, and a growing circular debt—a cycle of unpaid government subsidies that accumulates as debt for distribution companies.
