The federal government announced a significant petrol subsidy for motorcyclists and owners of 800CC cars as a way to help the masses in the face of biting inflation.
The plan will be completed in six weeks after all the necessary authorities have finished their analyses.
Musadik Malik, the state minister for petroleum, has explained the government’s plan for offering petrol at a discount.
The minister further assured that the International Monetary Fund (IMF) program would not be impacted because it is a cross-subsidy program in which the rich pay more to help the poor.
IMF & Subsidy on Petrol
The federal government and the International Monetary Fund (IMF) are still in discussion regarding the next loan installment. A 50 rupee petroleum levy on fuel products was one of many demands made during the negotiations by the international lender. The government’s mini-budget was one of the actions it took to meet IMF requirements; the discussions have focused on raising taxes to generate revenue.
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This new proposed subsidy was not discussed with the IMF before it was announced by the Pakistani government, which could be detrimental to ongoing negotiations. According to IMF lender resident Esther Perez Ruis, we are looking for more details on the program’s operation, cost, targeting, safeguards against fraud and abuse, and mitigating measures. “We will carefully go over these details with Islamabad,” she added.
The IMF favors strengthening protection for the most vulnerable and discourages unfunded, untargeted subsidies, as was previously mentioned.
What are your thoughts on this gasoline subsidy? Did it work? Feel free to comment below with your thoughts and let us know.
