ISLAMABAD: The federal government and the International Monetary Fund (IMF) have failed to reach an agreement on a proposed settlement plan aimed at reducing Pakistan’s gas sector circular debt by Rs1.7 trillion, according to official sources.
The talks took place during virtual discussions between Pakistan’s economic team and IMF officials. The government presented its plan to cut the circular debt, which has reportedly risen to around Rs3.3 trillion, but the two sides could not reach a consensus.
Sources said the IMF expressed concern over the growing debt burden and proposed new conditions for approving the settlement plan. Final negotiations are now expected during the IMF’s next economic review, scheduled for September.
According to the sources, the IMF wants the settlement plan to include losses incurred by gas companies, including unpaid receivables, and to recognize them as financial losses. The Fund has also suggested that the companies be recapitalized after the full extent of losses is recorded.
Officials from the Petroleum Division have reportedly raised objections to some of the IMF’s proposed conditions. Further discussions on the settlement plan are expected to continue in September, with any final framework to be developed in consultation with the IMF.
