Electricity consumers across Pakistan may soon face another steep price hike as the government moves to finalise a plan aimed at reducing the country’s rapidly growing circular debt. An exclusive document obtained by Samaa TV reveals that the Circular Debt Management Plan 2025–26 proposes major reforms, including tariff increases, to stabilise the struggling power sector.
According to the document, Pakistan’s circular debt, recorded at Rs1,614 billion last fiscal year, is now projected to surge to Rs2,348 billion, marking an alarming rise of Rs734 billion. Officials attribute this worsening situation to poor recovery rates and soaring electricity production costs, both of which continue to strain the national grid.
Sources confirm that the government has already assured the International Monetary Fund (IMF) that further tariff hikes are inevitable. These increases are being presented as essential steps to halt the continuous accumulation of circular debt and to meet IMF targets. The document underscores that eliminating the circular debt flow is now a national priority, with the ultimate goal of restoring financial discipline within the power sector.
To cut overall expenses, the plan calls for shutting down expensive power plants and shifting the country’s energy mix toward cheaper, more efficient sources. Power distribution companies have also been instructed to reduce technical and commercial losses through improved operational performance. Additionally, the government aims to enforce strict recovery of outstanding dues from K-Electric and Gencos to seal revenue leakages that have persisted for years.
With these measures underway, officials have warned consumers to brace for another financial hit. The upcoming tariff adjustments appear unavoidable as the government races to fulfil IMF conditions and rescue the power sector from further collapse.
