The International Monetary Fund (IMF) has asked Pakistan to submit a comprehensive plan to eliminate the gas sector’s circular debt, which has surged to Rs. 2,800 billion, official sources told ProPakistani.
To support repayments under the plan, the government is considering imposing a petroleum levy of Rs. 3 to Rs. 10 per liter, which could generate an estimated Rs. 180 billion annually. Additionally, a gas bill surcharge is also under discussion as a further repayment mechanism.
The federal government has begun formulating a debt resolution strategy that also includes seeking bank loans of up to Rs. 2,000 billion on concessional terms. Negotiations are ongoing with banks for possible interest waivers or reductions, particularly on Rs. 800 billion of outstanding interest, sources said.
The proposed plan includes phasing out repayments over five years. However, officials noted that eliminating circular debt will also require addressing the significant operational losses being incurred by the Sui gas companies and other state-owned oil and gas firms.