ISLAMABAD: Pakistan is set to present the International Monetary Fund (IMF) with a three-year plan to eliminate the gas sector’s circular debt, which has reached approximately Rs3.6 trillion.
The proposed plan is part of the government’s efforts to fulfil key IMF conditions ahead of economic review talks scheduled for the last week of September.
According to officials familiar with the matter, the Finance Ministry is expected to brief the IMF on the proposed settlement framework during the upcoming review. The final plan will be developed after consultations with the international lender.
Officials said the gas sector’s circular debt currently stands at around Rs3.6 trillion, including approximately Rs2.1 trillion in interest and Rs1.5 trillion in principal.
The debt has accumulated due to several factors, including tariff differentials, unpaid receivables and policy-related costs, placing significant financial pressure on the country’s energy sector.
The government’s three-year settlement plan is aimed at addressing the accumulated liabilities and preventing further growth in the gas sector’s circular debt.
The proposed strategy will be discussed with the IMF as part of Pakistan’s efforts to meet reform commitments and secure progress in the upcoming economic review.