Pakistan Aims to Clear Gas-Sector Circular Debt of Rs1.49 Trillion

The Pakistani government has unveiled a plan to clear its gas-sector circular debt of Rs1.49 trillion, which has risen to Rs3.6 trillion.

According to the plan, Rs540 billion will be paid through incremental dividends from Oil and Gas Development Company (OGDC), Pakistan Petroleum (PPL) and Government Holdings Pvt Ltd.

The government also plans to collect Rs270 billion by imposing a petroleum development levy at Rs5 per litre on annual sales of 18 billion litres of petroleum products, and Rs590 billion will be generated through a reduction in liquefied natural gas (LNG) cargoes and savings arising from replacement by natural gas.

The Petroleum Division is expected to receive Rs80 billion through LNG price recovery and Rs15 billion via take-or-pay claims.