- Says board meeting tentatively planned for late August once adequate financing assurances are confirmed
With the increase in petroleum development levy (PDL), Pakistan has completed the last prior action for the combined seventh and eighth review, said the International Monetary Fund (IMF), adding that the board meeting is tentatively planned for late August once adequate financing assurances are confirmed.
In a text message sent to media on Tuesday, IMF's Resident Representative for Pakistan Esther Perez Ruiz confirmed that the last prior action has been met.
The statement comes after the government on Sunday night decreased the petrol price by Rs3.05 per litre, and increased the price of High-Speed Diesel by Rs8.95 per litre.
However, the government decided not to pass on the full impact of decrease in petroleum prices as recommended by Oil and Gas Regulatory Authority (OGRA) but opted to increase the PDL rates up to Rs10 per litre and dealer margin in a fortnightly review of petroleum prices with effect from August 1,2022.
The rates of PL on petrol were revised upward from Rs10 to Rs20 per litre. The rate of PL on high speed diesel (HSD) was also increased from Rs5 to Rs10 per litre. Similarly, the PL rate on kerosene oil (SKO) was also increased from Rs5 to Rs10 per litre, while same was the case with light diesel oil (LDO).
Back in July, the IMF team reached a staff-level agreement (SLA) with Pakistan authorities for the conclusion of the combined seventh and eighth reviews of the Extended Fund Facility (EFF).
The agreement is now subject to approval of the Executive Board, after which “about $1,177 million (SDR 894 million) will become available, bringing total disbursements under the programme to about $4.2 billion,” the IMF had said in its statement then.
However, it was reported last month that the IMF was also looking to assess Saudi Arabia’s commitment to financing Pakistan before the multilateral lender disburses fresh funds to the country. The Washington-based lender wants to ensure that Saudi Arabia will follow through with as much as $4 billion in funding to Pakistan to ensure Islamabad does not have a financing gap after the IMF loan.
The IMF funding, along with other financing, is crucial for Pakistan that is desperately seeking dollar inflows in the face of falling foreign exchange reserves. The decline in reserves has hurt the currency, which saw its worst month in over 50 years in July.