Lahore March 12 2025: Sui Northern Gas Pipelines Limited (SNGPL), Pakistan’s largest gas distribution company, could receive a waiver on PKR 351 billion booked as late payment charges for gas creditors and the gas development surcharge. The relief is expected as part of the government’s circular debt settlement plan.
Under the proposed scheme, the government aims to replace costly debt with lower-interest financing to resolve the power sector’s outstanding dues in a single transaction. Arrangements have been finalized with commercial banks to raise the required funds, and the details have been shared with the International Monetary Fund (IMF). Additionally, the government will utilize budgetary resources to clear some payments owed to power plants.
In return, power plants will forgo late payment surcharges, a measure that will likely to apply to Pakistan State Oil (PSO) and Oil and Gas Exploration and Production Companies including other firms in the energy chain. While PSO and other entities have not recorded these charges in their financial statements, SNGPL has accounted for PKR 351 billion in surcharges related to delayed payments.
The government plans to repay the PKR 1.25 trillion debt over six years, with servicing covered by the existing PKR 2.83 per unit debt servicing surcharge imposed on consumers.
