ISLAMABAD: The International Monetary Fund (IMF) is reported to have rejected the initial proposal of the proposed subsidy on petrol.
Also read: Pakistan didn’t consult IMF before announcing petrol subsidy: Report
It may be recalled that on March 19, Prime Minister Shehbaz Sharif had announced a relief package for the poor which includes a subsidy of Rs50 per litre of petrol for low-income individuals who own small vehicles such as motorcycles, rickshaws, and 800cc cars.
Also read: PM Shehbaz announces Rs.50 per liter subsidy on petrol for low income people
However, soon after his announcement, Esther Perez Ruiz, the IMF’s resident representative in Pakistan said that the government did not consult with the fund about the fuel pricing scheme.
She mentioned that once the remaining points, including the fuel scheme, were settled, a staff-level agreement would be signed.
According to multiple media reports, plan by Shehbaz Sharif-led federal government to provide petrol for motorcycles and other cars with engines smaller than 800 cc at subsidized rates has drawn severe criticism from the IMF.
Also read: IMF sees hurdles, new fuel subsidy can further delay program: Bloomberg
The government has reportedly been tasked by the IMF to submit a comprehensive strategy that addresses the question of how much subsidy will be needed for this project. How many consumers will it have and where will they buy it? What would the scheme’s loss be in terms of money?
Reports quoted sources at the Finance Ministry as saying that the IMF has demanded a comprehensive plan of per litre 50 rupees subsidy on petroleum. The IMF has also reportedly insisted on creating a revamped petrol subsidy scheme and is pushing for more effective, targeted aid to the underprivileged.
