IMF opposes gas price reduction

The International Monetary Fund has pushed for limits on the federal government's authority to lower gas tariffs, according to The Express Tribune. The Cabinet Committee on Energy was told during a recent meeting that the lender wants changes to the Ogra Ordinance 2002 to reduce that authority, citing a widening tariff gap that feeds circular debt. The IMF also secured commitments to revise consumer gas prices on time after Ogra determinations and to report compliance.

The Ogra Ordinance 2002 was amended in March 2022 following IMF demands, and the government accepted that tariffs should track Ogra rulings. The gas sector runs a cross-subsidy model that shields poorer households but raises tariffs for other users, and without budgeted subsidies, utilities have little room to cut rates for industrial, commercial or CNG customers. Gas-sector circular debt stood at Rs3,288 billion as of June 30, 2025, including Rs1,468 billion of interest cost.

Under the IMF arrangements, the government agreed to define the gas circular debt precisely, verify debt statistics, set up monthly reporting, and devise a management plan. The World Bank supported that effort, and the resulting definition and debt tool reached Sui companies during May 2025. Lower bill collections at Sui Southern Gas and Sui Northern Gas, plus power-sector problems, are weakening exploration firms such as OGDC and PPL, and unresolved receivables could lead to losses.