PM fuel scheme to be shelved after decline in int’l oil prices, IMF told

Pakistan has assured the visiting International Monetary Fund (IMF) mission that the Prime Minister’s fuel relief scheme is purely temporary and will be abolished as soon as the oil prices drop in the international markets, reported 24NewsHD TV channel on Friday, quoting sources.

This assurance was given by Pakistani officials to the International Monetary Fund (IMF) during the ongoing negotiations. 

According to sources, the IMF delegation was told that the targeted subsidy is being provided under the Fuel Relief Scheme.

Pakistan presented the IMF with a detailed breakdown of petrol prices and associated costs during the briefing.

The sources said imported petrol costs approximately Rs250 per litre, while the fuel is being sold to consumers at around Rs390 per litre.

The briefing showed that taxes account for approximately Rs110 per litre, while various margins on petrol collectively amount to around Rs27 per litre, the sources said.

Despite the IMF’s reservations, the government is unlikely to prematurely end the three-month fuel compensation scheme for motorcyclists and small-car owners, officials said on condition of anonymity. However, an extension beyond the initial period may not be possible.

The IMF believes the scheme’s actual cost could exceed the government’s Rs75 billion estimate for three months.

The sources further revealed that the government handled the petroleum crisis amicably. The Pakistani officials said that introducing tax reform is the current government’s top priority.

Later, the IMF delegation held detailed talks with officials of the Ministry of Industries and Production in Islamabad.

Negotiations with the IMF are underway regarding a new auto policy.