Islamabad, Apr 27, 2025: State-owned electricity distribution companies (DISCOs) have faced a steep rise in financial losses, which have surged to Rs. 143 billion during the first nine months of the ongoing fiscal year.
This represents a sharp escalation of Rs. 41 billion compared to losses of Rs. 102 billion recorded during the same span last year.
While the increase in overall losses is alarming, there has been a remarkable boost in the recovery of dues.
As per reliable sources, the shortfall in recoveries by DISCOs shrank by Rs. 184 billion during the first three quarters of FY25.
The total amount of unpaid recoveries stood at Rs. 78 billion for this period, a significant improvement from Rs. 262 billion recorded during the corresponding period last fiscal year.
Industry insiders revealed that these figures, both in terms of mounting losses and reduced under-recoveries, are key components of the wider circular debt issues currently plaguing the country’s power sector.
In a bid to stabilize the financial health of the sector, the government has already implemented a substantial hike in the base electricity tariff.
According to sources, the basic unit price of electricity was increased by Rs. 7.12 during the current financial year, aiming to control the burgeoning deficit and improve liquidity in the energy market.
The circular debt crisis continues to be a major concern, affecting not just the distribution companies but also power producers and fuel suppliers.
Although the recovery figures show a positive trend, experts suggest that unless further structural reforms are undertaken, the losses will continue to mount.
Efforts are underway to introduce more stringent measures to curb electricity theft, improve billing systems, and upgrade aging infrastructure.
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However, the impact of these initiatives will take time to reflect fully in the financial outcomes.
The government’s decision to raise electricity prices has sparked mixed reactions among consumers, but officials maintain that without these tough measures, sustaining the country’s energy infrastructure would become even more difficult.
Going forward, policymakers are expected to announce additional reforms targeting operational inefficiencies, aiming to make DISCOs financially sustainable and reduce the chronic circular debt that hampers the entire energy sector.
