- PM Shehbaz orders finance ministry to re-engage with IMF.
- Premier tells ministry to renew case for easing public burden.
- Passing on full impact of int’l price to consumers “too much”: PM.
ISLAMABAD: The International Monetary Fund (IMF) has shown reluctance to accept Pakistan’s request for flexibility in petroleum levy adjustments, even as the government pushes for relief to shield consumers from the impact of rising global oil prices driven by the ongoing Iran war.
Informed sources said that Prime Minister Shehbaz Sharif was briefed on Thursday about the IMF’s initial response, which did not favour any compromise on the levy structure. However, the premier directed the Finance Ministry to re-engage with the IMF and make a renewed case for easing the burden on the public.
Officials said that the prime minister emphasised that passing on the full impact of the international oil price hike to consumers would be “too much” for the masses and could trigger a significant increase in inflation. He urged economic managers to explore all possible options to mitigate the fallout.
The development follows the government’s earlier move to get the IMF nod for adjusting petroleum levies in a way that could absorb part of the price shock. However, the Fund remains cautious, viewing petroleum levies as a key revenue stream and an important component of ongoing programme commitments. The issue had already come under discussion earlier this week. Prime Minister Shehbaz Sharif had instructed the Finance Division to engage the IMF over the levy structure on petrol and diesel, aiming to prevent any additional burden on the public amid surging global petroleum prices triggered by the Iran war.
The prime minister had asked the Finance Ministry to take up the matter with the IMF so that any required adjustment in petroleum prices could be offset against existing levies. Currently, the government imposes a levy of Rs100 per litre on petrol and Rs55 per litre on diesel, both forming part of IMF conditionalities.
The government has already extended substantial relief to consumers by spending around Rs129 billion in subsidies to keep fuel prices stable. Officials said this relief was managed through cuts in the development budget and savings from other expenditures, reflecting the government’s intent to cushion the public from external shocks.
Originally published in The News
