ISLAMABAD (Kashmir English): Differences persist between Pakistan and the International Monetary Fund (IMF) regarding the fuel relief scheme and the issue of circular debt in the gas sector; the IMF has emphasized providing relief through targeted assistance to deserving individuals rather than implementing a general fuel subsidy.
According to sources, a deadlock remains between the government and the IMF concerning petrol prices and the approximately Rs1.4 trillion in outstanding receivables owed to gas companies.
The IMF maintains that extending the fuel relief scheme beyond the initial three months would be difficult, whereas the government has decided not to immediately terminate the scheme for owners of motorcycles and small vehicles.
The government also presented a detailed breakdown of petrol pricing to the IMF; the cost of imported petrol is approximately Rs250 per liter, while it is available to consumers at around Rs390 per liter—a price that includes taxes and various margins.
Sources indicate that the actual cost of the three-month fuel relief scheme could exceed Rs75 billion. The IMF has urged the government to adopt a targeted assistance mechanism instead of relying on fuel subsidies or cross-subsidies.
It is worth noting that the government had approved a digital fuel relief scheme for low-income groups in September.
