IMF officials to discuss petrol, electricity subsidies in May: Finance Ministry

The Finance Ministry has said that officials from the International Monetary Fund (IMF) will visit Pakistan in May to discuss issues related...

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The Finance Ministry has said that officials from the International Monetary Fund (IMF) will visit Pakistan in May to discuss issues related to government subsidies on petrol and electricity.

 

The Finance Division said that the Pakistani delegation had several meetings with IMF officials. Photo: APP

The press release issued by the Finance Division comes at a time when Finance Minister Muftah Ismail is in Washington to attend the spring meetings of the World Bank and the IMF, where he met with senior IMF officials. He also said in a statement that the IMF had talked about ending fuel subsidies.

 

A press release issued by the Ministry of Finance said that the Pakistani delegation had several meetings with IMF officials including IMF Deputy Managing Director Antonet Sehh, Director Middle East and Central Asia Department Jihad Azor and Pakistani Mission Chief Nathan. Porter included, during the meetings they discussed ways to complete the Seventh Review.

 

Read also: Finance Minister meets IMF officials, agrees to end subsidies on petroleum products

 

In 2019, the IMF approved a 6 billion loan to Pakistan but delayed repayment due to concerns about the pace of reforms set by the IMF. The sixth review was completed in February. When the IMF agreed to release one billion dollars for Pakistan immediately.

Muftah Ismail outlined the government priorities and efforts to bring fiscal discipline while protecting vulnerable people from fluctuations in world oil prices, which the IMF supported.

The press release added that Muftah Ismail also met with World Bank officials including Managing Director (Operations) Axel van Trotsenberg, South Asia Vice President Hart Wig Schaefer and others to discuss the progress of ongoing loan programs and projects. At the same time, opportunities for further cooperation were also discussed.

Read more: Muftah Ismail leaves for US to meet with IMF officials

Muftah Ismail thanked the World Bank officials for the financial and technical assistance provided by Axel van Trotsenberg and for assuring full cooperation for Pakistan.

MFI demands

The finance minister said in his first press conference since taking office that the IMF wants fuel prices to rise to a break-even point and taxes to be restored, amnesty schemes for industries to be stopped and revolving loans to be reduced. The rate of electricity should be increased and financial savings should be ensured. The relief package given by former Prime Minister Imran Khan on February 28 should be withdrawn completely.

Muftah Ismail had signaled the end of tax exemptions for industries, adding that the IMF's main focus was on eliminating fuel subsidies as it was creating a huge financial gap while increasing electricity tariffs. There may be some delay in the demand as it does not have an immediate direct impact on the budget.