The International Monetary Fund (IMF) has urged Pakistan to present a detailed plan to eliminate the country’s growing gas sector circular debt, which has now reached a staggering Rs. 2,800 billion, sources revealed.
To tackle the crisis, the government is weighing several tough measures — including a petroleum levy ranging from Rs. 3 to Rs. 10 per liter. If approved, this new levy could generate approximately Rs. 180 billion annually. Authorities are also considering adding a surcharge to gas bills as another way to boost repayments.
In addition to these measures, the federal government is working on a broader debt resolution strategy. This includes negotiating up to Rs. 2,000 billion in bank loans on concessional terms. Talks are already underway with banks, with the government seeking interest waivers or reduced rates, especially on the Rs. 800 billion in outstanding interest payments.
The proposed roadmap aims to phase out repayments gradually over a five-year period. However, officials acknowledge that resolving the circular debt issue will also require addressing the substantial financial losses currently being incurred by the Sui gas companies and other state-run oil and gas enterprises.
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