New Delhi, Nov 27 (IANS):
Pakistan’s persistent energy crisis has been thrust back into the global spotlight following a critical new assessment by the International Monetary Fund (IMF). The Governance and Corruption Diagnostic Assessment: Pakistan (November 2025) presents a stark account of how chronic mismanagement, weak oversight, and political influence have pushed the country’s power and gas sectors into deep financial distress.
At the core of the problem is Pakistan’s circular debt, a massive and growing liability that now poses a direct threat to the national economy. According to the IMF, this burden is not the result of external shocks but of choices made by successive governments.
The report describes the energy sector as a “crime scene,” where political patronage often outweighs professional expertise. Key regulatory bodies — including NEPRA and OGRA — are cited for leadership appointments based on connections rather than merit. In OGRA, repeated extensions for the same officials and cases where a single person holds multiple top posts have severely compromised accountability.
The IMF also raises concerns over the government’s reliance on supplementary grants — funds issued outside the approved budget. In 2023–24, every rupee of these off-budget allocations flowed to the power and petroleum sectors. Similar patterns were seen in previous years. The report warns that such practices bypass parliamentary scrutiny and weaken financial discipline.
State-owned enterprises (SOEs), especially electricity distribution companies (DISCOs) and gas utilities, continue to bleed financially. Despite earning over 13 trillion rupees in revenue, federal SOEs reported a net loss of 30 billion rupees in 2024. The IMF attributes this not only to inefficiency but also to widespread theft and persistent political interference. Influential groups routinely consume electricity and gas without paying, knowing the state will absorb the losses.
Pakistan’s rising stock of government guarantees — now at 3.4 trillion rupees, largely tied to the energy sector — is another major red flag. These guarantees could quickly turn into fiscal obligations if SOEs default, increasing the likelihood of future bailouts.
The report even offers a cautious view of the Special Investment Facilitation Council (SIFC), which the government has promoted as a catalyst for reform. The IMF warns that the council’s extensive powers and built-in immunity could be misused unless transparency is strengthened.
