Pakistan didn’t consult on petrol subsidy, says IMF

Pakistan didn’t consult on petrol subsidy, says IMF

Islamabad (Web Desk): The International Monetary Fund (IMF) has said that the Pakistani government did not consult it ahead of announcing the petrol subsidy for the low-income people.

According to Bloomberg IMF’s resident representative for Pakistan Esther Perez said that the global lender was not consulted on the government’s plan to raise fuel prices for wealthier motorists to finance a subsidy for lower-income people.

She added that the IMF staff were seeking “greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities”.

On Monday, Minister of State for Petroleum Musadik Malik announced that the federal government decided to subsidise petrol up to Rs100 for motorcyclists and owners of vehicles up to 800cc.

He said the decision to provide fuel at subsidised rates will be implemented within six weeks.
Earlier, the government had decided to provide a subsidy of Rs50 per litre.

The minister said under a comprehensive strategy, subsidised petrol will be available to motorcyclists and owners of vehicles up to 800cc. He added that owners of vehicles above 800cc would be charged full price.

“The owners of big vehicles will pay more for petrol. The rich will pay Rs100 more for petrol while the poor will pay Rs100 less. 210 million people are poor in a population of 220 million, we stand with poor Pakistan.”

On the staff level agreement, the IMF said that Islamabad has made “substantial progress” in meeting the policy commitments required to unlock billions of dollars in loans.

“A staff-level agreement will follow once the few remaining points are closed,” the  IMF’s resident representative for Pakistan said.