Pakistan has missed an International Monetary Fund deadline to notify revised gas tariffs, placing the government in technical breach of a key structural benchmark under the $7 billion Extended Fund Facility as it continues to grapple with a Rs3.44 trillion circular debt in the gas sector
Under its commitments to the IMF, the government was required to notify the semiannual gas tariff by July 1, 2026, to ensure energy prices remain at cost recovery levels. The benchmark was among 11 structural reforms introduced during the third review of the IMF programme in April this year.
Officials said the delay was initially triggered by legal uncertainty over the appointment of Nabeel Ahmad Awan as Acting Chairman of the Oil and Gas Regulatory Authority. They also cited fluctuating global energy prices and delays in finalising the regulator’s revenue requirement determination for gas utilities.
According to officials, OGRA has now completed the procedural and legal requirements needed to determine the revenue needs of gas companies, including targets aimed at reducing unaccounted for gas losses. However, Awan reportedly held back the notification after seeking station-specific UFG reduction plans instead of the broader annual targets that gas utilities had previously followed.
The government is attempting to cut losses in the gas sector through improved system monitoring, stronger enforcement, and upgrades to ageing infrastructure. Historically, UFG losses have remained in the range of 9 percent to 14 percent despite repeated annual commitments by gas distribution companies to bring them down.
One official described the delay as a technical breach of the IMF benchmark and said the missed deadline would be addressed through later revenue adjustments. The official added that once OGRA issues its determination, the government plans to notify consumer gas tariffs without waiting for the full 40-day period permitted under the law.
Under the IMF programme, Pakistan has committed to maintaining cost-reflective energy tariffs to stop further build-up of circular debt. The government has also introduced a gas circular debt monitoring dashboard and plans to roll out a new Circular Debt Management Plan during the current fiscal year to improve the sector’s financial sustainability.
