Pakistan, Sept. 13 -- The government will present the IMF with a three-year plan to clear Pakistan's gas sector circular debt. The debt has reached around Rs3.6 trillion, or $12.9 billion, as officials prepare for review talks in late September. The Finance Ministry will brief the lender on the proposed settlement mechanism during the upcoming review. However, officials will finalise the framework after consultations with the IMF.

The gas sector's circular debt includes around Rs2.1 trillion in accumulated interest and Rs1.5 trillion in principal. Officials have linked the buildup to tariff differences, unpaid receivables and various policy-related expenses. A government committee report shows that tariff differences account for nearly R...