ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday challenged the Power Division’s circular debt report, calling it technical adjustments, accounting reclassifications, and changing goal posts without a material improvement in power sector efficiency.

The apex trade body also alleged the parking of financial liabilities outside balance sheets, particularly in the case of rising KE payables, and asserted that fiscal injections were being made from taxpayer money to show slower growth in circular debt rather than reducing the burden of cross-subsidies from the industrial sector.

In an analysis sent to Nepra and leading business houses, the FPCCI’s research team led by Rehan Javed said net circular debt increased by Rs75 billion during July-December 2025 compared to Rs79bn during July-September 2025, indicating no material improvement in underlying cash flows.

“Government injected Rs224bn through fiscal space (stock payments) during first half of the year, which significantly reduced the reported increase in circular debt,” it said, adding that Rs224bn following the Rs801bn payments in FY25 from fiscal space could have been split into two parts for removal of cross subsidy from industrial tariff and balance paid to reduce circular debt.

It said that without this fiscal injection, circular debt would have increased materially, confirming that the system remained operationally cash-negative and that the decline in payables to power producers reflected timing differences and accounting reclassification rather than improved collections or lower costs.

It pointed out that a key accounting change was the reclassification of liabilities from ‘amount parked in PHL’ to ‘CD Financing’, which altered presentation but did not reduce total obligations.