ISLAMABAD (Mudassar Ali Rana) – The government has prepared a plan to eliminate the gas sector’s circular debt by increasing the Petroleum Development Levy (PDL) on petroleum products by an additional Rs5.
According to sources, out of the total gas sector circular debt of Rs3,180 billion, a settlement plan of Rs1,700 billion has been devised. This includes Rs1,400 billion related to non-recovery, line losses and tariff differentials, while Rs300 billion comprises taxes and interest.
Sources said the plan aims to completely eliminate the gas sector’s circular debt over the next six years. The proposals include imposing an additional Rs5 PDL on petroleum products and using dividends received from gas companies, instead of transferring them back, to help settle the circular debt.
It is estimated that the additional Rs5 PDL will generate around Rs550 billion, while nearly Rs700 billion will be adjusted against circular debt through dividends and higher tariffs.
Sources further revealed that reducing LNG cargo imports under the plan would result in savings of around Rs500 billion. Approval for the gas sector circular debt elimination plan will be sought from the Prime Minister’s Office and the Ministry of Finance.