Not consulted on plan to raise fuel prices to finance subsidy: IMF

The International Monetary Fund (IMF) has stated that the Pakistani government did not consult the organisation regarding its plan to provide petrol subsidies for low-income groups, Bloomberg reported on Tuesday.

IMF’s resident representative for Pakistan Esther Perez, who spoke with the international publication, indicated that the lender was not informed about the government’s strategy to increase fuel prices for wealthy individuals to finance a subsidy for low-income people.

Perez stated that IMF staff members are seeking more information on the scheme’s operation, cost, targeting, protection against fraud and abuse, and offsetting measures, and will discuss these elements with the authorities.

On the previous day, Minister of State for Petroleum Musadik Malik stated that the federal government had decided to provide relief in petrol prices to motorcyclists and owners of vehicles up to 800cc by up to Rs100 to mitigate the effects of high petrol prices on inflation-affected people.

Malik stated that the decision to provide fuel at reduced prices would be implemented within six weeks and that the government would make petrol more affordable for the poor.

The IMF has stated that Pakistan has made significant progress in meeting the policy commitments needed to unlock billions of dollars in loans, but a few remaining points must be addressed before a staff-level agreement can be reached.

Finance Minister Ishaq Dar had previously stated that the global lender wished to see countries fulfil the pledges they have made to assist Pakistan in bolstering its finances before approving the bailout package.

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