ISLAMABAD: The federal government has prepared a strategy to reduce circular debt of Pakistan following the conditions tabled by International Monetary Fund (IMF) to revive $7 billion Extended Fund Facility (EFF) stalled for months.
According to details, the Ministry of Finance prepared strategy for the repayment of country’s circular debt as the International Monetary Fund (IMF) and Pakistan would hold another round of technical talks for revival of stalled loan programme.
Sources told that Rs543 billion plan has been prepared to eliminate circular debts in the energy sector. “In this regard, the government would also provide Rs241 billion and Rs302 to Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL),” they claimed.
Sources further said that the amount received by the Sui Southern will clear the debt of Oil & Gas Development Company (OGDCL). Moreover, they added, the SSGC would pay Rs8 billion to private companies and Government Holdings Private Limited (GHPL).
Meanwhile, the Sui Northern Gas would pay Rs172 billion, Rs90 billion and Rs40 billion to Oil & Gas Development Company (OGDCL), Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL), respectively.
Earlier on February 2, it was reported that the International Monetary Fund (IMF) expressed concern over the circular debt in the gas sector of Pakistan.
“IMF delegation expressed reservations over the existing circular debt in the gas sector and stressed bringing immediate reforms to the energy sector,” said sources.
The Fund officials insisted Petroleum Division’s officials take action against gas theft besides taking necessary steps to stop technical losses in the sector.
Pakistan had secured a $6 billion IMF bailout in 2019, which was topped up with another $1 billion last year, but the lender then stalled disbursements in November due to Pakistan’s failure to make more progress on fiscal consolidation and economic reforms.
It is pertinent to mention here that the IMF officials have tabled tough demands before releasing $1 billion dollar tranche during the second day of talks with the Pakistani government to unlock stalled funds from a $7 billion bailout.
‘Tough conditions’
International Monetary Fund (IMF) has asked Pakistan to impose roughly Rs600-800 billion in additional taxes in the second round of talks to revive $7 billion Extended Fund Facility (EFF).
During the meeting, the Fund set tough conditions for additional measures that included imposing roughly Rs600-800 billion in additional taxes.
