IMF 'agrees' to fuel subsidy for consumers, seeks limits on beneficiaries

The International Monetary Fund (IMF) has agreed to the government’s proposal to provide a fuel subsidy to consumers, while insisting that the number of beneficiaries should not be expanded and that the subsidy remain limited to small vehicles, according to sources.

The development comes as Pakistan and the IMF continue negotiations on economic and financial policies under the ongoing loan programme.

According to sources, the IMF has also called for the withdrawal of tax exemptions for electric vehicles (EVs) under the proposed auto policy.

Meanwhile, the IMF is seeking deregulation of Pakistan’s sugar sector. However, the Sindh government has objected to the federal sugar policy, terming it an interference in provincial autonomy.

The disagreement has so far prevented the finalisation of the sugar policy.

The IMF mission is scheduled to hold another meeting with officials of the Ministry of Finance today, sources said.

The IMF delegation is also expected to meet officials of the Ministry of Petroleum. The Pakistani delegation will be led by the Petroleum Minister, with discussions expected to focus on the gas tariff structure and circular debt in the gas sector.

Sources said the IMF mission will also meet officials of the Ministry of Privatisation to discuss the proposed privatisation of power distribution companies (DISCOs) and the issue of line losses.

Meanwhile, negotiations between the IMF mission and the Federal Board of Revenue (FBR) have been completed, according to sources.