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KARACHI, August 19, 2026: The government has proposed a plan to settle Rs1.49 trillion of Pakistan’s Rs3.6 trillion gas sector circular debt, according to a framework presented by the Ministry of Petroleum to the Cabinet Committee on Energy (CCOE).
The total circular debt includes around Rs1.8 trillion in principal liabilities. The remaining amount consists of late payment charges, tariff differences and power sector settlement claims.
Under the proposed plan, the government aims to raise Rs540 billion through higher dividend payouts from state-owned exploration and production companies, including OGDCL, PPL and GHPL.
Another Rs270 billion is expected to come from Petroleum Development Levy (PDL) collections. Based on current estimates, the amount could support a multi-year settlement plan.
The framework also includes Rs590 billion in operational savings, mainly through reduced reliance on expensive spot LNG imports. A further Rs95 billion is expected from price adjustments and the settlement of take-or-pay contracts.
Major listed energy companies, including OGDCL, PPL, PSO and MARI, are expected to benefit from improved liquidity as outstanding receivables are cleared.
Meanwhile, SNGPL and SSGC, along with PSO, could benefit from the clearance of LNG receivables and a reduction in inter-corporate debt across the energy sector.
Market estimates suggest that OGDCL could announce dividends of around Rs40–50 per share, while PPL could announce Rs80–105 per share. These payouts could form a significant part of the proposed Rs540 billion dividend-based settlement, with the remaining amount expected through GHPL.
The proposed settlement could provide a major boost to the energy sector by easing working-capital pressures, improving cash flows and strengthening the financial position of key companies. It could also create greater room for exploration spending and potential shareholder dividends.
