ISLAMABAD: Pakistan and the International Monetary Fund (IMF) remain at odds over fuel subsidies and the circular debt in the gas sector, with the two sides yet to reach an agreement on key issues.
According to sources, the IMF is pushing for the elimination of broad fuel subsidies and wants relief to be limited to targeted assistance for eligible consumers. The government, however, has decided not to immediately withdraw the proposed fuel relief scheme for motorcycles and small vehicles.
The IMF has reportedly maintained that the fuel relief scheme cannot be extended for more than three months. The cost of the subsidy for the three-month period could exceed Rs75 billion, according to sources.
Pakistan has also presented the IMF with a detailed breakdown of petrol pricing. Sources said imported petrol costs around Rs250 per litre, while consumers are paying approximately Rs390 per litre. The retail price includes around Rs110 in taxes and approximately Rs27 in various margins.
