ISLAMABAD: The International Monetary Fund (IMF) has asked the government of Pakistan to submit a detailed plan to eliminate circular debt in the gas sector.
Official sources confirmed, circular debt in the gas sector has surged to a staggering Rs 2,800 billion, causing significant financial strain on Sui gas companies and other state-owned oil and gas enterprises.
Sources further revealed that the government has begun formulating a strategy to address the issue. As part of the plan, authorities are considering acquiring up to Rs 2,000 billion in loans from banks to help settle the outstanding liabilities.
Sources said that the government is consulting with banks to borrow on easy terms, talks between the government and banks are underway for an interest waiver or reduction of Rs 800 billion.
Apart from this, the proposal to impose a levy levy of Rs 3-10 per liter is being considered on petroleum products for loan payments, while gas bills are also being considered to impose additional surcharges for loan payment, the government will pay the loan obtained from banks in the next five years.
Sources added that the government is likely to get Rs 180 billion annually if the petroleum levy is imposed, but to remove the circular loan, the government will have to overcome the extraordinary losses of Sui gas companies.
