Pakistan, IMF talks hit deadlock over fuel subsidy, Rs1.4 trillion gas receivables

Pakistan's talks with the International Monetary Fund have stalled over a fuel compensation scheme and a plan to cancel Rs1.4 trillion of receivables owed by gas firms, Express Tribune reported. The lender wants targeted subsidies and late payments waived. Officials said the three-month relief for motorcyclists and small-car owners is unlikely to end early, though any extension may be out of reach.

According to the report, the IMF believes the scheme could cost more than the Rs75 billion the government estimated for three months. This round is the fourth review under the $7 billion facility, alongside Article IV consultations. Petroleum Division data shared with the lender show import-level petrol cost, excluding taxes and margins, near Rs250 per litre, while buyers pay about Rs390. Taxes make up nearly Rs110 per litre of that price and various margins add Rs27.

On gas-sector debt, the IMF wants receivables from delayed payments written off, while the Petroleum Division contends the state cannot walk away from obligations owed to distribution and exploration firms. The proposal would clear Rs3.6 trillion of circular debt by using tariff differential claims held by Sui firms, with resulting payments reaching OGDC, PPL and GHPL. Extra dividends are proposed for those three firms, where the state holds large stakes. The IMF has questioned possible leakage to minority shareholders and whether other inflows would suffice.