Islamabad: The Power Division has addressed concerns over a Rs. 79 billion rise in circular debt during the first quarter of the fiscal year 2025-26, emphasizing that this increase is not indicative of a renewed upward trend. The clarification came amid reports suggesting a deviation from the government’s commitment to managing circular debt.

A spokesperson for the Power Division explained that the quarterly increase should be considered in context. In the same quarter last year, the circular debt rose by Rs. 73 billion, but by the end of the fiscal year, the total debt had been reduced by Rs. 780 billion. The spokesperson attributed the current increase to seasonal and operational factors, which are expected to reverse throughout the year.

The spokesperson highlighted that during the July-September 2025 period, distribution company inefficiencies were reduced by Rs. 67 billion compared to the previous year. This, they said, demonstrates the government’s commitment to improving the power sector’s operational performance and financial discipline.

Furthermore, the spokesperson assured that these interim fluctuations in circular debt do not affect consumer tariffs, which will continue to be determined through established regulatory processes.