The International Monetary Fund (IMF) has called on Pakistan to avoid expanding fuel subsidy schemes and ensure that any support remains targeted, limited and temporary.
The IMF has stressed the need for Pakistan to maintain energy-sector reforms and keep fuel prices aligned with international market conditions while protecting vulnerable households through targeted support.
Under Pakistan’s ongoing IMF programme, the country has committed to refraining from introducing new fuel subsidy or cross-subsidy schemes. The Fund has also emphasized reducing costly and distortionary energy subsidies while improving the financial sustainability of the energy sector.
The IMF has further urged Pakistan to continue reforms in the energy sector, improve revenue collection and take measures to reduce production costs and address losses.
The Fund has also called for improvements in the gas sector, particularly through better revenue collection and efforts to reduce losses.
The IMF has stressed the need for greater spending on health and education while maintaining fiscal discipline. Its Pakistan programme documents emphasize strengthening social protection and human capital alongside economic reforms.
The development comes after Prime Minister Shehbaz Sharif announced a three-month fuel relief scheme aimed at providing targeted assistance to lower-income fuel consumers. Under the scheme, motorcycle owners were eligible for relief on up to 20 litres of petrol per month, while owners of vehicles with engines up to 800cc were eligible for relief on up to 30 litres.
The government had allocated Rs75 billion for the relief programme.
