Pakistani authorities did not consult with the International Monetary Fund (IMF) staff ahead of announcing their recent fuel subsidy proposal, the lender’s resident representative said.
\n\u201cThe Pakistani authorities did not consult with the IMF staff ahead of announcing their recent fuel subsidy,\u201d Resident Representative of IMF Esther Perez said in an interview on Tuesday.
\nPrime Minister Shehbaz Sharif announced on Sunday that the low-income segment of the country would be given a subsidy of Rs50 per litre as part of the petroleum relief package, a move aimed at regaining the political capital amidst the soaring inflation and depreciation of the rupee.
\nThe relief would be given to low-income consumers, who have motorcycles, rickshaws, 800 cc cars and other small vehicles, according to the government\u2019s plan.
\nIt was increased to Rs100 the next day as announced by junior petroleum minister Musadiq Malik on Monday.
\n\u201cThe prime minister has ordered for implementing of petrol relief scheme within six weeks,\u201d he said, adding that no additional subsidy would be given from the government exchequer.
\nAccording to Malik\u2019s estimates, a low-income person needed around 21 litres of petrol per month. \u201cFor cheap petrol, a message will be sent. Motorcycles will not be given more than two or three litres of petrol in one go. The poor will be given a relief of Rs100 on every litre of petrol,\u201d he added.
\nThe subsidy came at a time when the ruling coalition government is dealing with multiple challenges of a tottering economy, political instability, and an uptick in terror attacks.
\nA deal with the IMF is important for Pakistan to avoid default, many experts said as the country imposed Rs170 billion of taxes, removed the artificial cap on the dollar, and raised tariffs. All these decisions were taken to unlock more than $1 billion of funding under the stalled programme.
\nBut, the country is yet to sign the staff-level agreement with the IMF as the lender demands it to materialise the commitments made by friendly countries. It has also asked Islamabad to tax the rich to provide subsidies to the poor.
\nWhen\u00a0a foreign news outlet reached out to the IMF for a comment, the representative said: \u201cFund staff are 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.\u201d
\nThe International Monetary Fund said Pakistan has made \u201csubstantial progress\u201d toward meeting policy commitments needed to unlock billions of dollars in loans the country needs to avoid a default.
\nShe also said that a staff-level agreement will follow once the few remaining points were closed. \u201cEnsuring there is sufficient financing to support the authorities in the implementation of their policy agenda is the paramount priority,\u201d Perez added.<\/p>\n","protected":false},"excerpt":{"rendered":"
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