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IMF rejects proposed petrol subsidy, creating potential financial strain

IMF rejects the proposed petrol subsidy. They are creating potential financial strain. The International Monetary Fund (IMF) has rejected the initial proposal for a petrol subsidy and has asked the
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  • IMF rejects the proposed petrol subsidy.
  • They are creating potential financial strain.

The International Monetary Fund (IMF) has rejected the initial proposal for a petrol subsidy and has asked the Pakistani government to provide a complete plan for the subsidy.

Sources reveal that the IMF has requested a comprehensive plan from the government, specifically for a subsidy of Rs—50 per liter.

Sources in the Ministry of Finance have reported that Pakistan recently held a virtual meeting with the IMF. The IMF stressed the need for a revised petrol subsidy plan and more effective targeted subsidies for low-income people.

It is worth noting that the IMF had previously expressed reservations about Prime Minister Shehbaz Sharif’s announcement of a petrol subsidy scheme, stating that there had been no consultation with the IMF about the subsidy.

Also Read: Relief for Consumers: Petroleum Product Prices Drop by 15-20 Rupees per Liter

The IMF’s Special Representative has stated that the fund has measures to prevent abuse, manage costs, and ensure proper targeting of subsidies. The IMF requests further details from Pakistani authorities regarding the scheme regarding these measures.

It is worth remembering that Prime Minister Shahbaz Sharif had previously announced a subsidy of Rs—50 per liter on petrol for people with low incomes. The government had proposed to provide this subsidy to owners of motorcycles and 800cc vehicles.

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