The International Monetary Fund has estimated Pakistan’s gas sector circular debt at ₨3.442 trillion, or 2.7% of GDP, as of December 2025, despite regular tariff adjustments preventing fresh accumulation of principal debt.
According to the IMF’s latest review report, late payment surcharges on the existing debt stock continued to increase overall circular debt.
The Fund said gas companies remained under financial pressure due to weak domestic consumption, lower demand from the power sector and the captive power plant transition, although industrial gas consumption rose 29% year-on-year during the first half of FY2027.
Pakistani authorities informed the IMF that the government had developed a comprehensive circular debt dashboard, initiated a quarterly gas circular debt reporting system and prepared a Circular Debt Management Plan expected to be implemented in FY27 after approvals.
The government also plans to establish a dedicated circular debt settlement office and continue sharing quarterly gas circular debt data, along with monthly consumption and revenue figures, with the IMF and development partners.
Under the IMF programme, Pakistan committed to ensuring full pass-through of international energy prices through semi-annual gas tariff revisions scheduled for July 1, 2026 and February 15, 2027 based on determinations by the Oil and Gas Regulatory Authority.
The authorities also committed to passing imported RLNG costs to consumers while protecting low-income households through targeted subsidies and managing surplus RLNG through coordination with the power sector.
The IMF projected Pakistan’s current account to remain in a small deficit in FY26 due to higher global energy prices and rising imports, with further deterioration expected in FY27 because of elevated oil and gas prices.
The Fund stressed the need to keep domestic fuel, electricity and gas prices aligned with actual costs while continuing reforms to reduce inefficiencies and improve energy sector finances.