IMF Demands Comprehensive Plan from Pakistan to Eliminate Gas Sector Circular Debt

Islamabad – The International Monetary Fund (IMF) has asked the Government of Pakistan to present a detailed and comprehensive plan to eliminate the growing circular debt in the gas sector, which has now reached a staggering Rs 2.8 trillion, according to sources in the Petroleum Division.
This mounting debt is causing severe financial strain on Sui gas companies and state-owned oil and gas enterprises. In response, the government has begun drafting a strategy to address the crisis.
Key Measures Under Consideration:
The government is considering borrowing up to Rs 2 trillion from commercial banks to ease the burden, and consultations have already begun to secure these loans on favorable terms.
Negotiations are underway with banks to waive or reduce Rs 800 billion in interest payments on existing liabilities.
To raise revenue for debt repayment, the government is mulling over the imposition of a petroleum levy ranging from Rs 3 to Rs 10 per liter on fuel products.
An additional surcharge on gas bills is also under review to support debt repayment.
If the petroleum levy is implemented, the government expects to generate Rs 180 billion annually, which will contribute to servicing the bank loans over a five-year repayment plan.
Officials acknowledge that controlling the unprecedented losses of Sui gas companies is essential to permanently resolving the circular debt issue and meeting IMF requirements.