Petroleum Ministry given six weeks to prepare relief plan

The petroleum minister stated that the government is creating a gasoline price plan to benefit the poor, a programme that some economists worry may obstruct a vital payment from the International Monetary Fund that is required to avert economic collapse.

The government’s proposals for gasoline price were initially disclosed by Prime Minister Shehbaz Sharif last week.

Oil Minister Musadik Malik told Reuters that his ministry had been given six weeks to draft the relief plan, which calls for raising fuel prices for wealthy consumers while using the extra revenue to lower costs for the poor, who have been particularly hard hit by inflation, which in February reached its highest level in fifty years.

This Thursday, Esther Perez Ruiz, a local IMF official, said that the government had not consulted the fund about the fuel pricing plan. She said the fund will request further information from the government regarding the idea, including how it would be put into practise and what safeguards will be put in place to avoid abuse.

Malik said that the programme was not a subsidy when asked about the IMF’s worries. He stated, “We haven’t heard any worries from the IMF. It’s the same as what we did in the gas industry, and the IMF approved of it, he said.

The government introduced various natural gas rates earlier this year based on the quantity of fuel used. According to economists, the plan might scuttle Pakistan’s recent gains in discussions with the IMF. The staff level agreement may be delayed since it appears that this was not addressed with the IMF, according to former deputy governor of the central bank Murtaza Syed.