Pakistan and the International Monetary Fund (IMF) held virtual discussions to address the country’s growing gas sector circular debt. The debt has reached nearly Rs3.3 trillion, creating financial pressure on the energy sector.
During the meeting, both sides discussed a proposed settlement plan to reduce around Rs1.7 trillion of the outstanding debt. However, officials did not reach a final agreement during the talks.
The discussions focused on possible measures to improve the financial condition of gas companies and reduce the burden on the sector.
IMF Suggests New Conditions for Debt Settlement
According to officials, the IMF proposed several conditions for implementing the settlement plan. One major suggestion involves recording losses faced by gas companies in their official financial accounts.
The IMF recommended treating unpaid recoveries owed to gas companies as losses instead of pending receivables. After recording these losses, companies would receive recapitalization support.
However, officials warned that following these conditions could affect the market value of gas companies. The share prices of these companies may face pressure after financial adjustments.
The Petroleum Division has reportedly shown concerns over the IMF’s proposed conditions. Officials are reviewing the impact of these measures before making a final decision.
Further Discussions Expected in September
Pakistan and the IMF are expected to continue discussions in September to finalize the circular debt settlement strategy.
Officials said the government may prepare a revised plan according to IMF recommendations. The aim is to reduce financial challenges while ensuring stability in the energy sector.
The gas sector’s circular debt has remained a major challenge for Pakistan. Rising losses, unpaid bills, and operational inefficiencies have increased pressure on energy companies.
Pakistan Faces Delays Over New Auto Policy
Meanwhile, Pakistan also continues discussions with the IMF over its new automobile policy. Negotiations between the government and the IMF could not reach a final conclusion.
As a result, the existing auto policy may remain active for another year. Officials from the Ministry of Finance said the previous policy expired on June 30, while authorities failed to introduce a new framework.
The government plans further discussions with the IMF on the revised auto policy draft. Officials said Pakistan also faced difficulties in fully implementing the previous policy.
Prime Minister Shehbaz Sharif reportedly expressed concerns over delays in finalizing the new automobile policy. However, officials believe completing negotiations within the coming month may remain difficult.
Both the gas debt settlement and auto policy discussions highlight Pakistan’s ongoing efforts to manage economic challenges while meeting IMF requirements.
