IMF seeks details on operation, cost, targeting, protections against fraud and abuse, and offsetting measures.
Govt, a day earlier, had announced subsidy help inflation-hit masses.
IMF says Islamabad has made “substantial progress” on policy commitments.
The International Monetary Fund (IMF) said that the Pakistani government did not consult the global lender on its petrol subsidy for low-income groups, reported Bloomberg on Tuesday.
Esther Perez, the IMF’s resident representative for Pakistan, told the publication that the lender was not consulted on the government’s plan to raise fuel prices for wealthier motorists to finance a subsidy for lower-income people.
“Fund staff are seeking greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities,” said Perez.
‘This is not subsidy’
A day earlier, Minister of State for Petroleum Musadik Malik announced that the federal government in order to cushion the effect of high petrol prices on inflation-hit masses decided to subsidise petrol up to Rs100 for motorcyclists and owners of vehicles up to 800cc.
“Prime Minister Shehbaz Sharif has directed to provide subsidy on petrol to low-income people up to Rs100 per litre,” Malik told journalists in Lahore.
Earlier, it was decided to provide a subsidy of Rs50 per litre.
The minister said under a comprehensive strategy, subsidised petrol will be available to motorcyclists and owners of vehicles up to 800cc.
Malik further said owners of vehicles above 800cc would be charged full price.
He said the decision to provide fuel at subsidised rates will be implemented within six weeks, adding that the government will make petrol cheaper for the poor.
“The owners of big vehicles will pay more for petrol. The rich will pay Rs100 more for petrol while the poor will pay Rs100 less. 210 million people are poor in a population of 220 million, we stand with poor Pakistan.”
He said that the decision on the gas tariff has been implemented from January 1. “We have separate tariffs for the poor and the rich.”
Pakistan has made ‘substantial progress’: IMF
On the staff level agreement, the IMF said that Islamabad has made “substantial progress” in meeting the policy commitments required to unlock billions of dollars in loans.
“A staff-level agreement will follow once the few remaining points are closed,” said Perez told Bloomberg.
“Ensuring there is sufficient financing to support the authorities in the implementation of their policy agenda is the paramount priority.”
Last week, Finance Minister Ishaq Dar had said that the global lender wanted to see countries finalise commitments they have promised to help Pakistan shore up its funds before signing off on the bailout package. Pakistan needs to repay about $3 billion of debt by June, while $4 billion is expected to be rolled over.
Pakistan has taken tough measures including increasing taxes and energy prices, and allowing its currency to weaken to restart a $6.5 billion IMF loan package. The funds will offer some relief to a nation still reeling from last year’s devastating floods and help pull the economy out of a crisis ahead of elections this year.
KARACHI: The open market exchange rate between the US dollar and the Pakistani rupee (PKR) was Rs279.4 on February 07, 2025, with a selling rate of Rs281.1. The interbank exchange rate between the US dollar and the Pakistani rupee is Rs 278.45, according to Interbank.
There was no movement in the US dollar (USD) from the previous closure of Rs278.
Chinese companies have been invited by Sindh Chief Minister Syed Murad Ali Shah to visit Karachi and other regions of Sindh Province in order to observe the quickly growing businesses and investigate prospects in fields like clean energy, infrastructure development, and public transit projects.
Speaking in Beijing to a delegation headed by the chairman of NORINCO International Co., Ltd., he stated that all facilities required would be provided by the governments of Sindh Province and Pakistan.
With assistance from NORINCO International, the Sindh Chief Minister stated that the Provincial Government will firmly urge North Vehicle and BeiBen to think about setting up a Vehicle Assembly Plant in the Dhabeji Special Economic Zone.
In order to strengthen collaboration in the fight against money laundering, terrorist financing, and associated crimes, the Saudi Press Agency announced this week that the Saudi cabinet, led by Crown Prince Mohammed bin Salman, had approved a memorandum of understanding (MoU) with Pakistan’s Financial Monitoring Unit (FMU).
Due to its severe money laundering and terrorism funding issues in recent years, Pakistan was added to the Financial Action Task Force’s (FATF) grey list in June 2018.
The nation was taken off the gray list in October 2022 after enacting extensive measures to fortify its financial system.
The FMU is Pakistan’s financial intelligence unit, created under the Anti-Money Laundering Act of 2010 and tasked with collaborating with foreign partners and evaluating reports of suspicious transactions.
According to the SPA, “the cabinet approved a memorandum of understanding regarding cooperation in exchanging investigations related to money laundering, terrorist financing, and related crimes between the Financial Monitoring Unit in the Islamic Republic of Pakistan and the General Department of Financial Investigation at the Presidency of State Security in the Kingdom of Saudi Arabia.”
The MoU is an indication of Saudi Arabia and Pakistan’s growing strategic partnership. A significant Pakistani diaspora resides in the Kingdom, and numerous Pakistani businesses have established a presence there.
Saudi Arabia has been a key supporter of Pakistan’s economy, bolstering its reserves with substantial deposits in the State Bank of Pakistan and offering deferred oil payment facilities.