Pakistan, June 5 -- The government has taken a major step to address the growing circular debt in Pakistan's gas sector, which has reached Rs2.8 trillion. To find a practical solution, it hired the audit firm KPMG to create a Circular Debt Management Plan (CDMP). This plan aims to be acceptable to the International Monetary Fund (IMF) and help resolve the long-standing issue.

Pakistan's total circular debt in the energy sector now stands at Rs5 trillion. The gas sector contributes Rs2.8 trillion, while the power sector holds Rs2.3 trillion of this debt. A large part of the gas sector's debt, about Rs800 billion, is due to Late Payment Surcharges (LPS), sources revealed.

The Sui gas companies-Sui Northern and Sui Southern-face a shortfal...