Islamabad (Commerce Desk): The Government of Pakistan has formulated a comprehensive plan to eliminate approximately Rs 1,500 billion of circular debt in the gas sector within three years and has sought approval from the International Monetary Fund.
According to sources, the plan was discussed during the third review of the $7 billion bailout program, but the IMF has not yet made a final decision. The government aims to secure IMF approval before June so that funds can be allocated in the next budget to cover one-third of the total payable amount.
Officials stated that the total circular debt in the gas sector has surpassed Rs 3,400 billion, including approximately Rs 1,800 billion of principal. The government intends to pay off around Rs 1,500 billion, while the remaining amount is tied up in tax refunds and ongoing court cases.
Under the plan, payments to oil and gas companies will be made on the condition that they waive nearly Rs 1,600 billion in surcharges imposed for delayed payments.