ISLAMABAD: The International Monetary Fund (IMF) has reportedly given conditional consent to the Prime Minister’s fuel subsidy for consumers, but has asked Pakistan not to expand the number of beneficiaries and keep the relief restricted to small vehicles.
According to sources, the IMF mission has agreed to the government providing fuel relief to consumers while imposing conditions on the scope of the subsidy scheme.
The IMF has specifically demanded that no additional consumers be added to the fuel subsidy programme and that the facility remain limited to small vehicles.
The development provides conditional support to the government’s plan to provide relief to eligible consumers amid elevated petrol prices, but limits the possibility of expanding the scheme to a wider segment of vehicle owners.
The government has been working on economic and fiscal policy measures in line with the IMF’s conditions, while negotiations between the IMF mission and Pakistani authorities continue on several sectors.
The IMF mission is scheduled to hold another meeting with officials of the Petroleum Division, with the petroleum minister expected to lead the Pakistani delegation.
Gas tariff structure and the circular debt of the gas sector are expected to be discussed during the meeting as part of broader efforts to address financial and structural issues in the energy sector.
The IMF mission is also holding discussions with the Power Division as the government works on measures linked to the energy sector.
Meanwhile, the IMF has demanded deregulation of the sugar sector. However, the issue remains unresolved after Sindh raised objections to the federal government’s sugar policy, terming it an interference in provincial autonomy.
The IMF has also called for withdrawal of tax exemptions for electric vehicles under Pakistan’s auto policy.
The IMF mission is further scheduled to meet officials of the Privatisation Commission, where privatisation of distribution companies (Discos) and measures to reduce line losses are expected to come under discussion.
Negotiations between the IMF mission and the Federal Board of Revenue (FBR) have already been completed, according to sources.
The ongoing talks cover a broad range of fiscal, energy, taxation and structural reforms that Pakistan is required to undertake under its IMF programme.
