By Staff Reporter
ISLAMABAD: Pakistan’s Minister of State for Petroleum, Musadik Malik, on Tuesday affirmed the government’s commitment to address concerns raised by the International Monetary Fund (IMF) over the proposed fuel pricing scheme aimed at helping the underprivileged.
“We originally thought that it (fuel pricing scheme) was a much simpler idea, because previously when we were negotiating with the IMF and the bank was also supporting the negotiations,” Malik told Bloomberg in an interview.
The relief package seeks to charge affluent consumers more for fuel and use the additional funds to reduce prices for the poor who have been severely affected by record-high inflation in April.
“… so, in essence, we were subsidising the poor but charging a little bit more to the rich.”
Minister Malik said the proposed scheme follows a similar approach used for the gas sector, with increased charges for wealthy consumers while providing relief for those less financially stable.
However, the IMF has expressed reservations over the government’s lack of consultation with them about the scheme, and has asked for more details, including how it would be implemented and what safeguards would be put in place to prevent abuse.
Malik confirmed that the government is willing to engage in dialogue with the IMF to address their concerns.
“With our petroleum scheme, we saw that IMF had some queries and concerns, so we want to make sure, that if we move forward, we take care of their concerns and make sure that they (IMF) completely understand what we are trying to do and why.”
Malik comments comes when IMF Executive Board is scheduled to meet until May 17, but Pakistan’s ninth review under the Extended Fund Facility (EFF) programme is missing from the agenda.
Pakistan’s economic recovery has been hindered by delays in reaching a deal on the ninth review under the Extended Fund Facility (EFF) program with the IMF, which is necessary to release critical funds.
The staff-level agreement to release $1.1 billion has been delayed since November, and the IMF is reportedly showing a lack of confidence in Islamabad.
The government has implemented various measures, including raising energy tariffs and key interest rates to a record 21 percent, to unlock the funding.
The IMF has requested an assurance that Pakistan’s balance of payments deficit is fully financed for the fiscal year ending in June, prior to the budget for the next fiscal year.
Copyright © 2021 Independent Pakistan | All rights reserved
