The International Monetary Fund (IMF) has said the Prime Minister Fuel Relief Scheme cannot be extended beyond three months, sources said, as Pakistan and the Fund remain divided over petrol subsidies and the circular debt of the gas sector.
According to sources, the IMF has told Pakistan that the actual cost of three months of fuel subsidy could exceed Rs75 billion. The two sides are holding talks, but the disagreement over the subsidy and the circular debt remains unresolved.
During the negotiations, Pakistani officials briefed the IMF delegation on the scheme, under which targeted subsidies are being provided. They said the relief measures are temporary and will be withdrawn once global oil prices decline.
Officials also told the delegation that the government has managed the oil crisis effectively. They said tax reforms are its top priority and that revenue collection will be increased.
Pakistan also gave the IMF a detailed cost breakdown of petrol prices. Imported petrol costs about Rs250 per litre, while consumers pay Rs390 per litre. The price includes about Rs110 per litre in taxes and Rs27 in various margins.
Separately, the IMF delegation met officials of the Ministry of Industries and Production. Talks on the auto policy are ongoing.
