Pakistan has cut power sector losses by 45 percent, according to Federal Minister for Energy Sardar Awais Ahmed Khan Leghari.
That is a significant claim. Pakistan’s electricity sector has been one of the most expensive problems in the national economy for over a decade — consuming billions in subsidies, generating the circular debt crisis, and failing millions of consumers with chronic load shedding. A 45 percent cut in losses, if sustained, would be one of the most meaningful improvements in years.
Here is what has actually changed — and where the problems remain.
What “Power Sector Losses” Actually Means
Power sector losses in Pakistan fall into two categories.
The first is technical losses — electricity that is lost during generation, transmission, and distribution due to equipment inefficiency, old infrastructure, and poor maintenance. These are measured as a percentage of total electricity generated.
The second — and more politically sensitive — is commercial losses, also called non-technical losses. This is electricity that reaches consumers but is never paid for, either because of theft, illegal connections, billing failures, or meter tampering. In some areas of Sindh, Balochistan, and KPK, commercial losses run above 30 percent of distributed electricity.
The combination of technical and commercial losses determines how much of every unit of electricity generated actually turns into revenue for the system. Pakistan has historically had combined losses of 17-22 percent — among the highest in the region.
What the 45% Reduction Means in Practice
The petrol price has undergone successive downward revisions, with a cumulative reduction of about Rs109 per litre. The energy sector improvements are happening alongside fuel price reductions — both reflecting the government’s push to ease the cost burden on consumers since the US-Iran ceasefire lowered global energy prices.
A 45 percent reduction in power sector losses — if the baseline was, say, 20 percent combined losses — would bring the figure to roughly 11 percent. That would still be higher than the best-performing Asian utilities but significantly better than where Pakistan was two years ago.
The improvement matters for the circular debt problem. Circular debt in Pakistan’s power sector had crossed Rs2.6 trillion by early 2026 — meaning the government owed money to power producers who owed money to fuel suppliers who could not run plants at full capacity. Every percentage point reduction in losses reduces the amount of unpaid electricity flowing through the system.
What Has Not Changed: Load Shedding Reality
The 45 percent loss reduction is a supply-side improvement. It does not automatically fix the demand-side problem that Pakistani families feel most directly.
Load shedding continues in high-loss, low-recovery areas — which are often the same areas where commercial losses are highest. The areas that steal the most electricity are also the areas that experience the most outages, because utilities reduce supply to districts where collection rates make distribution financially unviable.
That contradiction — people stealing electricity AND experiencing more outages than paying customers — reflects the fundamental governance problem in Pakistan’s power sector that loss reduction alone cannot solve.
For families in Karachi’s KE service area, Lahore’s LESCO network, or Peshawar’s PESCO region: the relevant question is not the national loss percentage — it is how many hours your specific feeder is scheduled for load management today. That remains a function of your area’s recovery rate, not the national headline figure.
What Comes Next: The LNG Price Hike
One development that will complicate the improvement narrative: Pakistan has increased the notified prices of liquefied natural gas (LNG) by up to 16.17 percent, according to a government notification issued on Saturday, raising the cost of gas supplied through both the Sui Southern Gas and other networks.
Higher LNG prices mean higher electricity generation costs, because Pakistan’s thermal power plants depend heavily on imported gas. If generation costs rise while electricity tariffs stay fixed, the circular debt gap widens again — partly offsetting the savings from reduced transmission and distribution losses. Dawn’s energy coverage has consistently documented how LNG import costs represent Pakistan’s most volatile electricity cost input.
The power sector’s financial health depends on three things simultaneously: reducing losses (being done), collecting bills (improving), and keeping generation costs manageable (now under pressure from the LNG hike). All three need to move in the right direction at the same time. Right now, two are improving and one is getting worse.
