Pakistan and the International Monetary Fund (IMF) have agreed during ongoing negotiations to keep the Prime Minister’s fuel subsidy scheme limited to existing beneficiaries. However, the global lender has maintained its condition that no new beneficiaries should be added to the programme.
According to sources, the issue of reducing the petroleum levy on petrol and diesel has yet to be resolved, as the IMF has not agreed to a reduction.
Sources said the IMF has agreed to continue the Prime Minister’s fuel subsidy for existing beneficiaries but has opposed expanding its scope to include additional consumers.
The global lender has proposed limiting the subsidy to motorcycles, three-wheelers and vehicles with engines of up to 800cc.
According to sources, the IMF mission will hold another meeting with officials of the Ministry of Petroleum, with the Pakistani delegation to be led by the Petroleum Minister. The meeting will review the gas tariff structure, circular debt in the gas sector and other related matters.
Progress is also being made on the preparation of the Memorandum of Economic and Financial Policies (MEFP) between Pakistani authorities and the IMF. In this regard, the mission is holding talks with officials of the Ministry of Petroleum and the Power Division, while further discussions with Finance Ministry officials are also expected.
During the negotiations, the IMF has also called for the deregulation of the sugar sector with the consent of the provinces.
However, the Sindh government has objected to the federal sugar policy, describing it as interference in provincial autonomy. According to sources, the policy for deregulating the sugar sector has not yet been finalised due to Sindh’s reservations.