IMF rejects Pakistan's initial proposal on fuel subsidy

ISLAMABAD: The International Monetary Fund (IMF) has rejected Pakistan’s initial proposal for subsidy on petroleum, citing sources ARY News reported on Wednesday.

“The lending institution has demanded the complete plan of the petroleum subsidy from the government,” sources said.

“The IMF has demanded a comprehensive plan of per litre 50 rupees subsidy on petroleum,” sources at the Ministry of Finance shared.

Pakistan has been in virtual contact with the IMF and the institution has insisted for preparation of revised plan of subsidy on petroleum, sources said.

“The government had proposed subsidy on fuel for motorcycles and small 800 CC vehicle owners,” according to sources.

The International Monetary Fund is demanding of the government for an effective and targeted subsidy to the poor segment of the society, sources added.

Earlier, the IMF wanted friendly countries to honor their commitments to fund cash-strapped Pakistan before the multilateral lender signs off on a $6.5 billion bailout program.

Pakistan was trying to get written assurances from Saudi Arabia and the United Arab Emirates (UAE) about external financing to strike a staff-level agreement with the IMF.

Sources said that the PM Office, the foreign ministry and the finance ministry have become active to meet the condition of the IMF for the confirmation of $3 billion in external funding from Saudi Arabia and the UAE.

The IMF is seeking written assurance from the executive directors of Saudi Arabia and UAE about external financing to Pakistan, the sources said.

Earlier, the International Monetary Fund resident representative Esther Pérez Ruiz said that the IMF bailout package is not linked to elections in Pakistan.

Esther clarified that it had not placed any condition for the revival of the loan programme for Pakistan. “We cannot interfere in the constitutional process of Pakistan through a loan programme.”