Government Considering Up to Rs. 10 Per Liter Hike in Petrol Levy to Address Circular Debt Ask ChatGPT
The International Monetary Fund (IMF) has urged Pakistan to submit a detailed and actionable plan to resolve the mounting circular debt in the gas sector, which has reached a staggering Rs. 2,800 billion, according to official sources.
To support the financial restructuring, the government is considering the introduction of a petroleum levy ranging between Rs. 3 to Rs. 10 per liter. This new measure is expected to generate around Rs. 180 billion annually. Additionally, the imposition of a gas bill surcharge is also being explored as another revenue-generating tool to aid in debt repayment.
The federal government has begun working on a comprehensive debt resolution strategy. One major component of this strategy includes seeking concessional bank loans amounting to Rs. 2,000 billion. Negotiations with financial institutions are underway to secure interest waivers or reductions, especially on Rs. 800 billion in outstanding interest.
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The proposed plan envisions a phased debt repayment structure over five years. However, officials emphasized that merely raising funds will not be enough. Long-term resolution will also require addressing operational inefficiencies and significant financial losses incurred by Sui gas companies and other state-owned oil and gas entities.
The strategy is being prepared as part of Pakistan’s broader commitment to financial reforms under the IMF program.
