The differences between Pakistan and the International Monetary Fund over the future of the fuel relief scheme have not yet been resolved. In the talks, the government is discussing a policy of providing immediate relief to the public, while the IMF is emphasising prioritising limited and targeted assistance.
According to sources, the government has decided not to immediately end the current relief programme for motorcycle and small car owners. On the contrary, the IMF believes that it will be difficult to continue the scheme in the same manner after the initial three months.
A detailed calculation of the price of petrol was also discussed in the talks. Officials said that the cost of imported petrol is around Rs 250 per litre, while it is available to consumers for around Rs 390 per litre. This difference includes taxes, margins and other related costs.
According to the estimates presented by the government, the three-month fuel relief programme is likely to cost more than Rs 75 billion. The financial implications of the scheme have become a major part of the discussion in this matter, as the government has to maintain fiscal targets along with the relief.
The IMF has clearly suggested in the talks to avoid general fuel subsidies and provide direct assistance to deserving citizens. The aim of this approach is to channel limited government resources to consumers who have to bear the brunt of the price hike.
On the other hand, the gas sector’s receivables of around Rs 1.4 trillion are also under discussion. Discussions are underway between the government and the international lender on how to recover this amount and reduce the financial pressure on the sector.
The final structure of the fuel relief scheme is yet to be finalised. Issues related to its duration, scope and identification of beneficiaries are expected to be clarified in the upcoming talks. The decision could have a direct impact on citizens who use motorbikes or small vehicles for daily commuting.
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