Islamabad 23 July: The International Monetary Fund (IMF) has urged Pakistan to present a detailed strategy to address the mounting circular debt in its gas sector, which has ballooned to Rs. 2,800 billion.
Reports indicate that this figure is not just a fiscal burden but reflects profound structural inefficiencies, pricing anomalies, and weak governance. Experts warn that without bold and immediate reforms, the escalating debt could derail economic recovery and damage national energy security.
According to reports the federal government is developing a debt reduction plan that includes securing concessional bank loans of up to Rs. 2,000 billion. Sources reveal that discussions with banks are underway to explore the possibility of interest waivers or cuts, especially on Rs. 800 billion in outstanding interest.
READ MORE: Sui Southern Gas Company Announces Eid ul Adha Gas Supply Schedule
To facilitate repayment, the government is weighing the introduction of a petroleum levy between Rs. 3 and Rs. 10 per litre, potentially raising Rs. 180 billion annually. A surcharge on gas bills is also being considered as an additional revenue stream.
Receivables owed to SNGPL and SSGC by power producers, fertilizer firms, and government entities have accumulated significantly. SNGPL alone is reportedly burdened with over Rs. 1,800 billion in circular debt, mainly due to inadequate cost recovery from domestic and power sectors.
The Oil and Gas Regulatory Authority (OGRA) has frequently delayed or only partially approved tariff hike requests from gas utilities. Even when increases are approved, the federal government often postpones implementation due to political considerations—especially in election seasons.
