The International Monetary Fund (IMF) has urged Pakistan to present a detailed strategy to eliminate the gas sector’s circular debt, which has surged to Rs. 2,800 billion. To support repayments, the government is considering a petroleum levy of Rs. 3 to Rs. 10 per liter, potentially generating Rs. 180 billion annually. A gas surcharge on utility bills is also under review.
In parallel, the federal government is drafting a debt resolution plan involving Rs. 2,000 billion in concessional bank loans. Talks are ongoing with financial institutions for potential interest waivers or reductions on Rs. 800 billion in outstanding charges.
The proposed plan includes a five-year repayment phase, but officials stress that resolving the crisis will also require structural reforms to address heavy operational losses faced by Sui gas companies and other state-run energy firms.
