IMF Raises Concerns Over Pakistan’s Rising Gas Circular Debt, Seeks Clarifications

The International Monetary Fund (International Monetary Fund) has expressed concern over the rising circular debt in Pakistan’s gas sector, calling it a major strain on the country’s energy system and seeking further clarification from authorities.

According to sources in the Ministry of Petroleum, the government has submitted a gas sector circular debt management plan to the IMF.

The proposed plan includes imposing a Rs5 levy on gas consumption, using dividends from state-owned companies to reduce debt, and selling 35 liquefied natural gas (LNG) cargoes annually in the international market, which is expected to generate around Rs160 billion per year.

Officials also stated that improved recovery by Sui Northern Gas Pipelines Limited and Sui Southern Gas Company is projected to bring in an additional Rs61 billion.

However, IMF officials have raised key questions over the proposed circular debt management strategy and have requested further explanations from the government.

Sources further revealed that Pakistan’s gas sector circular debt has reached approximately Rs3,400 billion, while receivables of around Rs150 billion are pending with companies such as Oil and Gas Development Company Limited and other energy firms.

The IMF’s review is seen as critical for the approval of broader energy sector reforms under Pakistan’s ongoing economic stabilization program.