Pakistan’s energy landscape is a riddle that shouldn’t exist. On paper, the country has enough installed capacity to keep every home lit, every shop open, and every factory humming. Yet, each year, the familiar pattern returns: the power flickers, the fans grind to a halt, and industries slow to a crawl while the bills keep climbing.

At the center of it all sits the so-called “circular debt”, a term we’ve repeated so often it risks sounding harmless. In truth, it’s a chain of unpaid obligations that stretches from power distributors to generators and fuel suppliers. When the first payment is missed, the dominoes fall, and the entire machine begins to stall.

The real damage starts at distribution. Many state-run DISCOs are chronically behind in bill recovery. In some areas, their collection rates are so poor that even basic running costs can’t be covered. Those shortfalls pass straight to the Central Power Purchasing Agency, which then delays payments to generation companies and Independent Power Producers.

Fuel suppliers wait months for dues, plants scale down operations, and even fully functional capacity sits unused. It’s a vicious loop where inefficiency is quietly absorbed while efficiency brings........

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