IMF conditionally agrees to Pakistan fuel subsidy, seeks smaller-vehicle limit
The International Monetary Fund has conditionally agreed to Pakistan's proposed fuel subsidy for consumers. However, it has asked the government to keep the scheme limited to smaller vehicles. The development comes as Pakistan continues discussions with the IMF over economic and financial policies. According to sources, the IMF has also demanded further changes in the sugar sector. The lender wants Pakistan to deregulate the sugar industry as part of its policy requirements.
Sindh, however, has opposed the federal approach, calling it interference in provincial autonomy. The disagreement over the sugar policy has prevented the government from finalising the proposed framework. Meanwhile, the government has started work on economic and financial policies under IMF conditions. Officials from the Petroleum Division and Power Division are also holding discussions on related matters.
The IMF has asked Pakistan not to expand the fuel subsidy to additional categories of consumers. Its approval remains linked to keeping the assistance focused on smaller vehicles. The government's proposed scheme aims to provide fuel relief to eligible consumers under the prime minister's initiative. Separately, the IMF has called for an end to tax exemptions for electric vehicles under Pakistan's auto policy. The demand forms part of wider discussions between the government and the lender. Officials are expected to continue negotiations on several economic and energy-related matters.
The IMF mission is scheduled to meet Petroleum Ministry officials again. Petroleum Minister will lead the ministry's delegation during the discussions. Talks are expected to cover the gas tariff structure and circular debt in the gas sector. The IMF mission will also meet officials from the Privatisation Ministry. Discussions are expected to include the proposed privatisation of distribution companies and electricity line losses. Meanwhile, negotiations between the IMF mission and the Federal Board of Revenue have concluded.
