The International Monetary Fund (IMF) has asked the Pakistani authorities to provide more details about the petrol relief package causing more delay in the signing of the staff-level agreement.
The Fund rejected the original plan, claiming that more information was needed to confirm its economic feasibility. This was in response to the petroleum ministry’s half-baked proposal for cross-fuel subsidies.
The release raises the question of why the plan wasn’t discussed in private with the IMF review mission before its announcement by the PM Office and Ministry of Petroleum.
According to the narrative, the Ministry of Finance has distanced itself from the suggested plan just as Pakistan and the lender are edging closer to signing the contract.
Now, it has been suggested to the Ministry of Petroleum to withdraw the plan at this time and work out the policy specifics with the Ministry of Finance before involving the IMF in confidence for the upcoming review.
‘Not workable’
Meanwhile, Minister of State for Finance Dr. Aisha Ghaus Pasha has termed the petrol subsidy plan ‘not workable’.
Aisha Ghaus Pasha said there is no suggestion of a subsidy on petroleum products and that the Petroleum Division had proposed cross-subsidies on petroleum products, which is not feasible, after attending the Senate Standing Committee on Finance meeting.
She stated that discussions with the IMF were still continuing and that the lender still needed confirmation of the external funding from bilateral countries, such as Saudi Arabia and the United Arab Emirates, which was already in the process.
“There are indications that financial assistance is expected from bilateral friends very soon, that will help finalise the staff-level agreement with the IMF,” she said.
