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IMF snubs Shehbaz Sharif, rejects Pakistan’s proposed gasoline subsidy scheme

Islamabad: In a major setback for the Shehbaz Sharif-led government in Pakistan, the International Monetary Fund (IMF) has reportedly rejected Islamabad’s initial proposal to subsidize gasoline for low-income families in the cash-strapped country.

“The lending institution has demanded the full oil subsidy plan from the government… The IMF has demanded a full subsidy plan of PKR 50 per liter of oil,” finance ministry sources told ARY News.

Sources added that the IMF insisted on the preparation of a revised oil subsidy plan.

What did the IMF say?

The International Monetary Fund would be skeptical about the total amount of funding that will be needed for this program. Additionally, he raised questions about where the money will come from, how many consumers will benefit from the program, and the expected losses in exchange for the subsidy, according to local media.

In this regard, the global institution has reportedly asked the Pakistani government to share a comprehensive plan.

According to local sources, the IMF wants the federal government to provide an effective and targeted subsidy to the poor segment of society.

Earlier, the IMF urged friendly countries to honor their pledges to finance Pakistan amid severe economic crisis before it could sign off on the $6.5 billion bailout package.

Ramzan Relief Package

As fuel prices hit an all-time high in the country, Pakistani Prime Minister Shehbaz Sharif announced a relief package for poor families a few days ago under which a subsidy of PKR 50 will be given to them on every litre. gas, Dawn reported.

“People on low incomes will receive a subsidy of Rs 50 per liter under the Petroleum Aid Scheme,” read a statement from the Prime Minister’s Office (PMO).

Sharif further noted that the relief would be given to low-income consumers, who own motorbikes, rickshaws, 800cc cars or other small cars.

However, the Pakistani government has not shared further details of the proposed grant, according to reports.

Government says ‘all IMF conditions are met’

At a meeting of the Senate Standing Committee on Finance and Revenue, Pakistani Minister Aisha Ghaus Pasha affirmed that all IMF conditions had been met and added that assurances on funding from friendly countries would come soon.

Acknowledging the difficulties faced by Pakistan, she said that the government led by Shehbaz Sharif had reinstated the IMF program. She further claimed that China has helped the country and that assurances will come from Saudi Arabia and the United Arab Emirates (UAE).

Pakistan’s borrowing skyrockets to PKR 2.6 trillion

Massive financing needs have increased Pakistani government borrowing by 259% in the eight months of the current fiscal year, according to local media.

The federal government borrowed a total of PKR 2.6 trillion from banks – PKR 2 trillion from commercial banks and PKR 597.43 billion from the central bank – between July 1, 2022 and March 11, 2023, for the purpose of to cover the budget deficit, show the latest data released by the State Bank of Pakistan (SBP).

blame game

Amid the ongoing political crisis in the country, Prime Minister Shehbaz Sharif has said talks between the central government and Pakistan’s Tehreek-e-Insaf (PTI) leader Imran Khan will only be possible when the former Prime Minister will admit his wrongdoing and apologize to the people for all. the things he did, Geo News reported.

Addressing the National Assembly, Sharif said on Tuesday that the PTI leader had breached the IMF agreement.

Pakistan’s debt rose by 70% during his government’s tenure, Sharif said, adding that no projects had been launched.

(With agency contributions)

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