ISLAMABAD: The International Monetary Fund (IMF) has proposed new conditions for resolving Pakistan’s gas sector circular debt, including formal recognition of losses and restructuring measures for state-owned gas companies.
Sources said the IMF has asked authorities to record losses of the two government-owned gas companies in their official accounts. The fund has also suggested classifying amounts as losses where recovery is no longer considered possible.
After accounting for these losses, the gas companies should be recapitalized to strengthen their financial position and improve their ability to operate effectively.
However, officials from the Petroleum Division are reportedly reluctant to accept the proposal due to concerns that implementing the measures could reduce the value of the companies’ shares.
The gas sector’s overall circular debt has reached around Rs3.3 trillion, while a proposed settlement plan under discussion aims to address approximately Rs1.7 trillion of the outstanding amount.
Sources said recent virtual talks between Pakistan and the IMF did not result in a final agreement on the settlement plan. Further discussions are expected in September, with the possibility that a revised plan will incorporate the IMF’s recommendations.
