Pakistan, IMF remain divided over Rs1.7 trillion gas debt settlement plan
Shahzad Raza:
Islamabad:Pakistan’s gas sector circular debt has surged to Rs3.3 trillion, with the government and the International Monetary Fund (IMF) still unable to agree on a plan to cut the burden by Rs1.7 trillion, official sources said.
Sources said virtual discussions were recently held between Pakistani authorities and the IMF on a settlement plan aimed at reducing the circular debt, but both sides failed to agree on a final framework.
During the talks, the IMF proposed new conditions for the settlement plan.
According to the sources, the lender insisted that losses incurred by gas companies should also be reflected in the settlement plan. It further proposed that pending recoveries be treated as losses alongside existing liabilities.
The IMF also suggested that after accounting for the total losses, the gas companies should be recapitalised to improve their financial position.
However, officials from the Petroleum Division reportedly objected to the IMF’s proposed conditions, arguing that the recommendations require further deliberation.
Sources said the final round of negotiations on the settlement plan has now been postponed until September.
The government is expected to prepare the final debt settlement strategy in consultation with the IMF before any agreement is reached.
