IMF Awaiting Clarity on Pakistan's Petrol Subsidy Scheme
Key Highlights :
The International Monetary Fund (IMF) is awaiting clarity on Pakistan's petrol subsidy scheme, as Pakistani authorities have not yet withdrawn the proposed cross-fuel subsidy scheme in writing to the Fund, according to a media outlet. The scheme is being regarded as one of the reasons for the delay in the agreement between the two parties.
The IMF had raised objections to the proposal, asking Islamabad to share details about the implementation of the plan that was announced without ‘consultation’. Minister of State for Petroleum Musadik Malik had rejected the perception that the subsidy would violate the conditions, adding that the ministry had responded to all the queries in detail.
However, the media outlet, quoting an unnamed finance ministry official, reported that the IMF didn't ask for withdrawal of the cross-fuel subsidy in writing. Pakistan had placed its first order for discounted Russian crude oil under a new deal struck between Islamabad and Moscow, the petroleum minister said, with one cargo to dock at Karachi port in May.
The deal will see Pakistan buy crude oil only, not refined fuels, and imports are expected to reach 100,000 barrels per day if the first transaction goes through smoothly, Minister Musadik Malik told Reuters. "Our orders are in, we have placed that already," he said. "Yes it is true that we will be getting only crude, not refined oil," Malik said in response to confirm sources information whether that's correct.
He said Pakistan's Refinery Limited (PRL) will initially refine the Russian crude, with other refineries to be included later after a trial run. Russian Energy Minister Nikolay Shulginov led a delegation to Islamabad in January to hold talks on the deal, after which he said oil exports to Pakistan could begin after March.
The IMF is now awaiting clarity from Pakistani authorities on the proposed petrol subsidy scheme, as the Fund has yet to receive a written withdrawal of the plan. The delay in the agreement between the two parties is being attributed to the subsidy scheme, and the IMF has asked Islamabad to provide further details about its implementation.
The deal between Pakistan and Russia is expected to benefit both countries, as the former will receive discounted crude oil, while the latter will benefit from increased exports. The deal will see Pakistan buy only crude oil, not refined fuels, with the first cargo expected to dock at Karachi port in May.
Overall, the IMF is awaiting clarity on Pakistan's petrol subsidy scheme, as the Fund has yet to receive a written withdrawal of the plan. The deal between Pakistan and Russia is expected to benefit both countries, with the first cargo of discounted crude oil expected to dock at Karachi port in May.
