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Petrol relief package gives IMF ‘excuse’ to delay agreement

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2 years ago

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  • IMF verifying from KSA, UAE on financing before staff-level deal.
  • Fund rejects initial petrol subsidy plan.
  • Asks Pakistan to provide more details about fuel relief package.

ISLAMABAD: The International Monetary Fund (IMF) has asked the Pakistani authorities to provide more details about the petrol relief package causing more delay in the signing of the staff-level agreement, The News reported Thursday.

The half-baked cross-fuel subsidy proposal by the petroleum ministry has failed to convince the Fund, which has rejected the initial plan arguing that more details are required to verify its sustainability.

The question arises, according to the publication, as to why the PM Office and Ministry of Petroleum announced the plan without taking the IMF review mission into confidence prior to its announcement.

The report stated that the Ministry of Finance has distanced itself from the plan proposed at a time when Pakistan and the lender are inching towards signing the agreement.

The Ministry of Petroleum has now been advised to withdraw the proposal at this stage and iron out the policy details with the Ministry of Finance and then take the IMF into confidence in the next review.

‘Not workable’

Meanwhile, Minister of State for Finance Dr Aisha Ghaus Pasha has termed the petrol subsidy plan ‘not workable’.

Speaking to journalists after attending the Senate Standing Committee on Finance meeting, Aisha Ghaus Pasha said there is no suggestion of subsidy on petroleum products and the Petroleum Division had suggested cross-subsidies on petroleum products, which is not workable.

She said that the parleys with the IMF were continuing and now the only outstanding issue remained of the lender getting confirmation on external financing from bilateral countries, including Saudi Arabia and the UAE, which was underway.

“There are indications that financial assistance is expected from bilateral friends very soon, that will help finalise the staff-level agreement with the IMF,” she said.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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