December 18, 2022
2 mins read

Will IMF loans to Pakistan continue after cut in fuel prices?

The IMF agreement binds Islamabad to charge a levy of (Pakistani) Rs 50 on petroleum prices…writes MAHUA VENKATESH

As Pakistan drastically slashed fuel prices, what will the International Monetary Fund’s (IMF) stand on the ongoing loan programme? Will the multilateral agency continue with the financial assistance programme for Pakistan after the country’s Finance Minister Ishaq Dar reduced prices of petrol and diesel (Pakistani) by Rs 10 and Rs 7.5 respectively? As per the IMF loan rider, Pakistan, with its dwindling foreign exchange reserves amid strict repayment schedule, had committed to increase levy on fuel and eliminate subsidies.

IMF revived the $6 billion loan package under Extended Fund Facility in August. Local newspaper Dawn said that the programme’s ninth review is currently pending with remote talks being held between IMF officials and the government for the release of $1.18 billion.

The IMF agreement binds Islamabad to charge a levy of (Pakistani) Rs 50 on petroleum prices. While the government is currently charging a Rs 50 petroleum levy but on diesel it is Rs 25 on diesel. “Based on the agreement with the IMF, Pakistan must jack up the levy on diesel to collect the additional revenue,” Pakistan Observer said.

Meanwhile, on Thursday, Dar in a televised address said, “At this moment, the prime minister wants us to pass maximum relief to the public and we have been implementing that since October 30.”

Pakistan’s forex reserves have dropped below the $7 billion level. As on December 9, the reserves held by the State Bank of Pakistan was at $6.7 billion — the lowest in about four years.

Reports suggested that Pakistan may turn to its bilateral creditors including China, which accounts for 30 per cent of its total external debt pie for restructuring of debt. The country is also in talks with Saudi Arabia for a loan assistance which includes deferment of oil payment facility to Riyadh.

“At the risk of sounding an alarm, I have to say that we have no room left for error. Concrete measures that reassure markets and lenders are urgently needed,” Pakistan’s former Finance Minister Miftah Ismail, who was instrumental in reviving the IMF loan package by increasing fuel prices, wrote in an article that was published in Dawn.

ALSO READ: Bilawal Bhutto makes ‘derogatory’ remarks on Modi

Previous Story

Modi dials Putin, discuss Ukraine war

Next Story

Chinese actions an expression of Xi’s expansionism

Latest from -Top News

Hasina’s Defiant Words Before Ouster

Reportedly before leaving Hasina wanted to record a farewell speech to be aired on television, but military officials declined….reports Asian Lite News Following a violent student uprising last year, the Bangladeshi military

US Lawmakers Push AI Watchdog on China

The lawmakers stressed that “there is a strong national security need for better understanding, predicting, and preparing for the PRC’s AI progress…reports Asian Lite News Chairman John Moolenaar and Ranking Member Raja

Trump’s 51st State Pitch to Canada

The development follows a meeting between Trump and Canadian Prime Minister Mark Carney on May 6, where Trump praised Carney’s political success….reports Asian Lite News US President Donald Trump claimed that he

Azhar Acquittal Sparks Outrage in Bangladesh

Jailed for nearly 13 years for war crimes, Azharul was received by party leaders and activists at the jail gate by his radical supporters….reports Asian Lite News Once accused of committing crimes

Trump Warns Putin: ‘Playing with Fire’

Trump on Sunday made harsh remarks on both Putin and Ukrainian President Volodymyr Zelensky…reports Asian Lite News US President Donald Trump warned Russian President Vladimir Putin that he is “playing with fire”
Go toTop

Don't Miss

Nawaz Sharif to return to Pak soon?

PML-N President Shehbaz Sharif, who is also the former premier’s

FATF Retains Pakistan in Grey List, Turkey New Entrant

Turkey, Jordan and Mali have been included in the ‘grey