The International Monetary Fund (IMF) has agreed to the continuation of the Prime Minister’s fuel subsidy for existing beneficiaries but has demanded that no new consumers be added, sources said on Tuesday.
According to sources, the Fund has asked Pakistan to restrict the petrol subsidy to motorcycles, three-wheelers and vehicles with engines up to 800cc. The condition came during ongoing negotiations between Islamabad and the global lender.
Work has also started on drafting the Memorandum of Economic and Financial Policies (MEFP), the key document that sets out the policy commitments attached to the programme.
The IMF has sought deregulation of the sugar sector with the consent of the provinces. It has also demanded an end to the tax exemptions granted to electric vehicles (EVs) under the auto policy.
Separately, the IMF is holding talks with officials of the Ministry of Petroleum and the Power Division. The IMF mission is expected to meet Finance Ministry officials again today, with the gas tariff structure on the agenda.
