The government is weighing a Rs5 per litre increase in the petroleum development levy (PDL) as part of a plan to reduce the country’s Rs1.7 trillion gas sector circular debt, sources familiar with the matter said.
Under the proposed framework, the government aims to retire the debt over six years by raising around Rs550 billion through the additional levy. The plan also includes diverting dividends from state-owned gas companies and using savings generated by cutting the number of imported LNG shipments.
The gas sector’s total circular debt currently stands at roughly Rs3.18 trillion. Of the Rs1.7 trillion targeted for repayment under this strategy, about Rs1.4 trillion consists of non-recoveries, line losses, and tariff gaps, while approximately Rs300 billion relates to taxes and interest.
Dividends from gas companies would be redirected towards clearing the debt, with the additional PDL expected to contribute a significant portion of the required funds. The plan will be submitted to the Prime Minister’s Office and the Ministry of Finance for approval, sources added.
Petrol prices expected to drop
In a separate development, petroleum prices may see a substantial decrease from December 16, with reductions of up to Rs11.85 per litre, according to preliminary calculations cited by sources. High-Speed Diesel (HSD) is expected to experience the largest drop, with prices falling to around Rs270.80 per litre.
Kerosene Oil prices may fall by Rs11.70 per litre, while Light Diesel Oil (LDO) could see a decrease of Rs10.10 per litre. The Oil and Gas Regulatory Authority (OGRA) is scheduled to submit the final petroleum price calculations to the Finance Ministry on December 15.
