IMF says Pakistan didn’t consult on petrol subsidy

ISLAMABAD – The International Monetary Fund (IMF) has said that the Pakistani government did not consult it before announcing the petrol relief package for the low-income people.

IMF’s resident representative for Pakistan Esther Perez told  Bloomberg 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.

Perez said that the IMF staff were seeking 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, it was 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 further said 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.”

He said that the decision on the gas tariff has been implemented from January 1. “We have separate tariffs for the poor and the rich.”

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.

Who can avail the petrol relief package announced by PM Shehbaz?