Pakistan’s economy is in bad shape. Even after the coming of the Shahbaz Sharif government, the economy of Pakistan does not seem to be coming back on track. Meanwhile, the Shahbaz government can take such steps, which can make petrol and diesel more expensive in Pakistan. Reports suggest that the new government of Pakistan has decided to accept the recommendations of the International Monetary Fund (IMF) for the bailout package.
What is the recommendation of IMF?
A report by news agency AFP states that one of the two key conditions of the IMF is to reduce government subsidies on petrol and diesel. According to the report, the new Finance Minister of Pakistan Miftah Ismail has approved the reduction of subsidy on petrol and diesel on 22 April.
Along with this, he has given his yes to the IMF’s recommendations to discontinue the business tax exemption scheme. Those who watch the economy of Pakistan believe that this move of the Government of Pakistan can lead to a big increase in petrol and diesel in Pakistan.
The package was approved in 2019
This bailout package was approved by the IMF in 2019 while Imran Khan was PM. However, in view of the ongoing slow economic reforms in Pakistan, the amount of the package was being distributed gradually. Miftah Ismail has said that the IMF has talked about removing subsidy on fuel and we agree with it. The government of Pakistan cannot afford the subsidy. So we have to reduce it.
How expensive will petrol and diesel be?
OGRA, the fuel regulating body in Pakistan, recently recommended increasing the prices of diesel and petrol. OGRA had recommended an increase of 83.5 Pakistani rupees per liter on petrol and 119 Pakistani rupees per liter on diesel.
According to Pakistani media reports, at present, the Government of Pakistan gives a subsidy of 52 Pakistani rupees per liter on diesel and 21 Pakistani rupees on petrol. In such a situation, it has to be seen how much subsidy the Pakistan government will reduce.
Imran’s government had increased the burden on the treasury?
Prior to Shahbaz Sharif, PM Imran Khan had announced cuts in petrol and electricity rates in February despite a hike in global prices to stay in power and get people’s support. Due to this, the burden of $ 373 billion increased on the Government of Pakistan. This has also put the ongoing IMF rescue program at risk. This information was recently given by a top official of the Government of Pakistan.