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Ministry given six weeks to draft fuel relief package

  • Petroleum Minister Musadik Malik says package is a pricing scheme and not a subsidy
Published March 24, 2023
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KARACHI: Government is drafting a fuel pricing scheme aimed at helping the poor, the petroleum minister said, a programme that some economists fear could hinder a crucial International Monetary Fund pay out needed to prevent economic collapse.

Prime Minister Shehbaz Sharif first announced the government’s plans for fuel pricing last week.

Petroleum Minister Musadik Malik told Reuters his ministry had been given six weeks to draft the relief package, which envisages charging affluent consumers more for fuel, and using that money to reduce prices for the poor who have been hit hard by inflation, which in February was at its highest in 50 years.

Govt announces fuel package relief for low-income families

“It is not a subsidy. It is a pricing scheme. It is a relief programme for the poor,” Malik said. A ministry spokesman said the price difference would be in the range of 100 Pakistani rupees (around 30 US cents) a litre for the rich and the poor.

With enough foreign reserves to only cover about four weeks of necessary imports, Pakistan is desperate for the IMF agreement to disperse a $1.1 billion tranche from a $6.5 billion bailout agreed in 2019.

The government has implemented several fiscal measures, including devaluing the rupee, lifting subsidies and raising energy prices as preconditions for the agreement, which the finance minister said this month was “very close”.

The resident IMF representative, Esther Perez Ruiz, said this week that the government did not consult the fund about the fuel pricing scheme.

She said the fund would ask the government for more details about the proposal, including how it will be implemented and what protection would be put in place to prevent abuse.

Asked about the IMF’s concerns, Malik said the scheme was not a subsidy. “We haven’t heard any concerns from the IMF,” he said. “It is same like we did in the gas sector, and that was okay with the IMF,” he added.

Earlier this year, the government implemented different prices for natural gas based on the amount of fuel consumed. Economists said the scheme could derail the progress Pakistan had made so far in negotiations with the IMF. “It seems this was not discussed with the IMF and, therefore, could delay the staff level agreement,” said former central bank deputy governor Murtaza Syed.


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Haq Mar 24, 2023 10:25am
Will govt apply the same scheme to it's own vehicles & end free petrol to govt employee (including judges & generals), who had been allocated 2 - 3 vehicles & enjoy hundreds of litres per month, even after retirement
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saeed Zafar Mar 24, 2023 11:00am
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Asif Nadeem Mar 24, 2023 11:15am
Asslam o alikum anyone here who shared me the full document where mentioned PTI govt Debt from internal sources and external sources with actual figures 0305-4074923 my whattsapp
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A. Tahir Mar 24, 2023 11:31am
Country is in state of economic meltdown compliments of egoistic dumb crooks who think they are smart! As long as country is run by Crooks & dumb Inc no progress is possible!
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Hafeez Mar 24, 2023 11:38am
In Ramadan... the entire country is praying…O’ God…please forgive our shortcomings…and shower your mercy and blessing on our country...please expedite the visit to heavens for our Crooks and Corrupt VVIPs…which is now overdue…and assign them a VVIP space in abyss. Ameen.
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Kalim Mar 24, 2023 12:51pm
It os a subsidy to a particular segment of thr society potentially funded by higher tier pricing for segments within the society. In a country where less the 4 mn people are chased for income tax, with more unregistered motorcycles than registered one, this will be a total disaster and impossible to implement and prevent abuse. Trying to implement multi-tier pricing by type of buyer is difficult enough for most compliant and digitally advanced society, this is not thought through.
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Shiteistan Mar 24, 2023 04:27pm
This guy Mussadiq is a consummate liar. Do not believe a word he says.
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