New Delhi: The latest report from the International Monetary Fund (IMF) has once more thrust Pakistan’s long‑standing power crisis into the global spotlight. In its most recent “Governance and Corruption Diagnostic Assessment: Pakistan (November 2025),” the IMF paints a bleak picture of how political patronage, weak oversight, and decades of mismanagement have pushed the country’s electricity and gas sectors into a deep debt spiral. At the heart of the problem lies the “circular debt,” a gargantuan financial burden that now threatens Pakistan’s overall economic health. According to the IMF, this debt is not a product of poor luck or external conditions but the result of deliberate choices by those in power. The report describes the energy sector as a “crime scene,” where political connections often outweigh technical expertise. It points out that senior officials at key regulators—NEPRA and OGRA—are frequently appointed on the basis of ties rather than merit, and that extensions of tenure, especially at OGRA, allow the same officials to remain in power without scrutiny. In some cases, one individual holds two top positions simultaneously, weakening checks and balances and undermining regulatory intent. The government’s reliance on supplementary grants—funds released outside the regular budget—has also drawn concern. In 2023‑24, every rupee of these extra funds went to the power and petroleum industries, a pattern that has repeated in earlier years and sidesteps parliamentary oversight, eroding fiscal discipline. State‑owned enterprises (SOEs), including electricity distribution companies (DISCOs) and gas firms, contribute heavily to the loss—despite generating more than 13 trillion rupees in revenue, federal SOEs recorded a net loss of 30 billion rupees in 2024. The IMF attributes these losses to inefficiency, widespread theft, and political interference, noting that powerful groups often use electricity and gas without paying, expecting the state to cover the shortfalls. Pakistan’s growing basket of government guarantees—now at 3.4 trillion rupees, most of it tied to the power sector—poses a serious risk. These guarantees could become imminent liabilities if state‑owned companies fail to meet their obligations, heightening the likelihood of future bailouts. Even the Special Investment Facilitation Council (SIFC), which the government presents as a flagship reform body, receives a cautious note in the report: its broad powers and immunity could lead to misuse unless proper transparency mechanisms are put in place.
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