The International Monetary Fund (IMF) has sought explanation from the government after terming the rising circular debt in Pakistan’s gas sector as a major strain on the energy sector.
According to details that surfaced on Monday, the government has submitted a gas sector circular debt management plan to the IMF. Sources within the Ministry of Petroleum has said that the plan proposed the imposition of a Rs5 levy on gas and the reduction of circular debt through dividends from state-owned companies.
Under the proposal, the government will sell 35 LNG cargoes annually in the international market. The sale of LNG cargoes is expected to generate Rs160 billion each year.
Officials said a plan has also been prepared to secure an additional Rs61 billion through improved recoveries by Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL).
The IMF has raised key questions over the gas circular debt management plan and sought further clarification from the government.
According to Ministry of Petroleum sources, the circular debt in the gas sector has reached nearly Rs3.4 trillion, while dues of Rs150 billion remain outstanding to OGDCL, PPL and other companies.
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