The Pakistan government has presented the International Monetary Fund (IMF) with a management plan to eliminate the gas sector’s circular debt, which has ballooned to approximately Rs3,400 billion, as both sides continue budget-related negotiations.

The plan proposes imposing a Rs5 per unit levy on gas consumers, generating additional revenue through dividends from state-owned companies, and selling 35 LNG cargoes annually on the international market, a move projected to yield around Rs160 billion per year.

Improved recovery performance by Sui Northern and Sui Southern Gas Companies is expected to generate an additional Rs61 billion under the plan.

The IMF delegation sought detailed clarifications on the circular debt issue, describing it as a major pressure point on the broader energy sector.

The fund raised significant questions about the gas circular debt management plan, signalling continued scrutiny before any formal endorsement.

Separately, outstanding payables of Rs150 billion owed to OGDCL, PPL, and other upstream companies remain unresolved and form part of the broader sectoral challenge.