\u2018Petrol relief package\u2019
\nMinistry had been given six weeks to draft relief package, Musadik Malik says
\n KARACHI
\nThe federal government is drafting a fuel pricing scheme aimed at helping the poor, Minister of State for Petroleum Musadik Malik said, a programme that some economists fear could hinder a crucial International Monetary Fund (IMF) payout needed to prevent economic collapse.
\nPrime Minister Shehbaz Sharif announced the government\u2019s plans for fuel pricing last week.
\nMalik told Reuters his ministry had been given six weeks to draft the relief package, which envisages charging affluent consumers more for fuel and using that money to reduce prices for the poor who have been hit hard by inflation, which in February was at its highest in 50 years.
\n\u201cIt is not a subsidy. It is a pricing scheme. It is a relief programme for the poor,\u201d Malik said. A ministry spokesman said the price difference would be in the range of Rs100 (around 30 US cents) a litre for the rich and the poor.
\nWith enough foreign reserves to only cover about four weeks of necessary imports, Pakistan is desperate for the IMF agreement to disperse a $1.1 billion tranche from a $6.5 billion bailout agreed upon in 2019.
\nThe government has implemented several fiscal measures, including devaluing the rupee, lifting subsidies and raising energy prices as preconditions for the agreement, which the finance minister said this month was \u201cvery close\u201d.
\nThe resident IMF representative, Esther Perez Ruiz, said this week that the government did not consult the fund about the fuel pricing scheme.
\nShe said the fund would ask the government for more details about the proposal, including how it will be implemented and what protection would be put in place to prevent abuse.
\n\u2018Scheme not a subsidy\u2019
\nAsked about the IMF\u2019s concerns, Malik said the scheme was not a subsidy. \u201cWe haven\u2019t heard any concerns from the IMF,\u201d he said. \u201cIt is the same as we did in the gas sector, and that was okay with the IMF,\u201d he added.
\nEarlier this year, the government implemented different prices for natural gas based on the amount of fuel consumed.
\nEconomists said the scheme could derail the progress Pakistan had made so far in negotiations with the IMF.
\n\u201cIt seems this was not discussed with the IMF and, therefore, could delay the staff level agreement,\u201d said former central bank deputy governor Murtaza Syed.<\/p>\n","protected":false},"excerpt":{"rendered":"
\u2018Petrol relief package\u2019 Ministry had been given six weeks to draft relief package, Musadik Malik says KARACHI The federal government is drafting a fuel pricing scheme aimed at helping the poor, Minister of State for Petroleum Musadik Malik said, a programme that some economists fear could hinder a crucial International Monetary Fund (IMF) payout needed […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-321358","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-top-news"},"yoast_head":"\n