Inefficiencies in Pakistan's power distribution companies (Discos) are contributing significantly to the country's circular debt, which has now reached Rs2.467 trillion. Despite claims of a 92.44% recovery rate, Discos are adding Rs50 billion monthly to the circular debt.
The latest data reveals that outstanding dues from public and private sector consumers have increased sharply, rising by 69.64% to Rs2.017 trillion in FY2025. Running defaulters, including influential figures, owe Rs1.094 trillion as of FY2024.
The growing default rate is exerting immense pressure on the power sector, highlighting ineffective recovery mechanisms. Consumers are bearing the cost of these inefficiencies through higher tariffs and surcharges.
Excessive transmission and distribution losses across Discos have caused an additional financial burden of Rs276.35 billion, while shortfalls in recovery of billed amounts have added Rs314.506 billion to the circular debt
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