Pakistan, IMF 'hold' virtual talks over gas sector circular debt Settlement plan
- By Shoaib Nizami -
- Jul 21, 2026
ISLAMABAD: Pakistan and the International Monetary Fund (IMF) held virtual discussions on various proposals aimed at reducing the gas sector’s circular debt, which has reached nearly Rs3.3 trillion, ARY News reported on Tuesday, citing sources.
According to sources, the talks focused on a proposed settlement plan to reduce the gas sector’s circular debt by around Rs1.7 trillion. However, no agreement was reached between the two sides during the virtual meeting.
Sources said the IMF has proposed new conditions for the settlement plan, including the requirement that losses incurred by gas companies be formally recorded in their financial books.
The IMF has suggested that recoveries owed to gas companies should be treated as losses rather than outstanding receivables. After recording these losses, the companies should be recapitalized, according to sources.
Sources further stated that implementing the IMF’s conditions could potentially lead to a decline in the share value of gas companies.
However, officials from the Petroleum Division are reportedly reluctant to accept the IMF’s proposed conditions for the circular debt settlement plan.
The two sides are expected to hold further discussions in September to finalize the settlement strategy. Sources said that the revised plan may be prepared in line with the IMF’s recommendations.
Read more: New auto policy delayed as Pakistan, IMF ‘fail to reach consensus’
Earlier, it emerged that the existing Pakistan auto policy is likely to remain in place for another year after negotiations on the new auto policy between the International Monetary Fund (IMF) and the Tariff Policy Board failed to conclude.
According to sources in the Ministry of Finance, it was agreed to continue the previous auto policy for an additional year.
Sources said further discussions with the IMF would be held on the revised draft of the new auto policy. The Pakistan government had also been unable to fully implement the previous automobile policy, sources added.
The previous policy expired on June 30, while the new auto policy could not be introduced, according to Ministry of Finance sources.
Sources said Prime Minister Shehbaz Sharif also expressed concern over the delay in implementation of the automobile policy. The possibility of finalizing negotiations on the new auto policy during the next month also appears unlikely, sources said.