IMF urges Pakistan to increase petrol prices immediately

ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistan to immediately increase petrol and diesel prices, sources said on Friday.

According to sources, the demand was made during virtual talks between Pakistani authorities and an IMF delegation.

The IMF asked the government to pass on any increase in petroleum product prices to consumers without delay and ensure that no subsidy is provided on petrol and diesel.

Sources said the IMF also emphasised that the government must protect its petroleum development levy (PDL) target of Rs1.468 trillion by June 30.

From July to December, the government collected Rs822 billion under the PDL, which is more than 60 per cent of the target for the fiscal year.

During the talks, both sides also discussed proposals aimed at saving energy and controlling the current account deficit.

According to sources, one proposal suggests shifting schools and colleges to online classes in the first phase, followed by the adoption of smart working arrangements for universities and government offices in the second phase.

Other proposals include fixing opening and closing hours for shops and markets and encouraging grocery stores and restaurants to adopt delivery services to reduce energy consumption.

Sources said a comprehensive implementation plan along with these recommendations would be presented to the government.

Notably, the federal government is considering enforcing a work-from-home (WFH) policy as part of Pakistan’s national fuel-saving plan amid potential oil supply disruptions in the Middle East following the Israel-US strikes on Iran, sources said on Thursday.

The conflict between the United States and Iran, which began on Saturday, has effectively disrupted shipping through the Strait of Hormuz.

Around one-fifth of the world’s seaborne crude oil passes through this waterway, along with significant volumes of liquefied natural gas (LNG).

Iran’s Revolutionary Guards said on Wednesday they had “complete control” over the vital waterway.

According to sources, the government has begun preparations for a national action plan aimed at conserving energy. As part of the plan, authorities are considering introducing online and smart working arrangements similar to those implemented during the Covid-19 pandemic.