Islamabad:
The International Monetary Fund (IMF) has asked Pakistan to submit a comprehensive plan to eliminate the growing circular debt.
According to sources, the gas sector’s circular debt has risen to RS2,800 billion, resulting in serious financial burden on SUI gas companies and other state oil and gas units. In response, the government is working on a strategy to tackle the crisis, which includes securing a loan of RS2,000 billion from banks on favorable terms.
Negotiations are reportedly underway with the banks to reduce or give up interest rates. The government is also considering introducing an oil tax on RS3 to RS10 per year. Liters and an additional supplement on gas bills to raise funds for debt repayment. Through the proposed petroleum tax alone, it expects to generate around RS180 billion.
Repayment of bank loans is expected to span over five years. Meanwhile, the government also has to reduce the operational loss of gas companies to effectively tackle the circular debt problem.
