In an effort to meet IMF bailout conditions, Pakistan has raised the petroleum levy by Rs 10 per liter, pushing it to Rs 70 per liter.
However, the prices of petroleum products will remain unchanged for the next 15 days, as per a notification issued by the Ministry of Finance.
According to Muhammad Sohail, CEO of Topline Securities, the government took the step to meet IMF requirements, paving the way for the release of the upcoming loan installment.
The increase in petroleum levy is part of broader economic adjustments under the IMF programme, which also includes reforms in taxation and the energy sector.
Electricity relief plan through public taxation
Meanwhile, Prime Minister Shehbaz Sharif has assured that the government is finalizing a relief package aimed at reducing electricity tariffs. The plan involves collecting additional taxes from the public to fund subsidies, ensuring that the financial benefit is directly passed on to consumers in the form of lower power bills.
The IMF had earlier demanded reforms in Pakistan’s tax and energy sectors, including the removal of tax exemptions and better revenue collection mechanisms. The hike in petroleum levy and the electricity relief plan are seen as steps towards meeting these conditions.
The IMF Executive Board is expected to review Pakistan’s progress on these economic measures before approving the next loan tranche, likely in May.
While the government remains optimistic, economic analysts warn that higher taxation on fuel and electricity may increase inflationary pressures.
Pakistan makes ‘significant progress’ in IMF talks
Federal Finance Minister Muhammad Aurangzeb expressed satisfaction over Pakistan’s negotiations with the International Monetary Fund (IMF), saying that “fruitful consultations” will continue next week.
Speaking exclusively to SAMAA TV, the finance minister stated that the implementation of the IMF program has remained strong, and the government has made significant progress in its discussions with the global lender.
“We have presented Pakistan’s economic performance to the IMF mission, and the talks have been positive,” he said.
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According to sources, the finance ministry briefed the IMF delegation on key economic indicators, revenue collection, and fiscal reforms undertaken as part of the loan program.
The government also assured the IMF of its commitment to structural reforms, including broadening the tax base and reducing fiscal deficits.
While a staff-level agreement has not yet been reached, officials remain hopeful that continued discussions will pave the way for securing the next tranche of financial assistance.
