Islamabad, July 23, 2025 — To address the mounting Rs. 2800 billion circular debt in the gas sector, the government is planning bold financial reforms that will shift the burden onto consumers, similar to the power sector’s strategy.
A high-level task force is actively considering imposing a special petroleum levy ranging between Rs. 3 to Rs. 10 per litre. In addition, a gas price hike is under review. The primary aim is to collect Rs. 250 billion annually to repay commercial bank loans expected to fund the Rs. 2000 billion debt clearance.
Experts suggest that a Rs. 1/litre levy would generate Rs. 18 billion annually, while Rs. 10/litre could yield Rs. 180 billion. The public will bear these costs over the next seven years through levies on petroleum products.
The task force includes retired Lt. Gen. Zafar Iqbal, Privatisation Minister Muhammad Ali, and technical experts from CPPA, SECP, and NEPRA. The remaining Rs. 800 billion debt—accrued through interest and surcharges—may be partially waived or paid off through restructuring.
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Additionally, the existing Rs. 160 billion cross-subsidy provided to various categories of protected and non-protected gas users will be phased out by December 2026. From January 2027, targeted subsidies will be launched using data from the Benazir Income Support Programme (BISP).
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These measures mark a significant shift in Pakistan’s energy debt management, aiming to bring long-term fiscal sustainability by directly engaging consumers in repayment through strategic levies and price adjustments.
