Govt tells IMF it will scrap fuel subsidy plan
THE government has told the International Monetary Fund (IMF) it would not implement a fuel subsidy programme as the two sides negotiate a long-delayed $1.1 billion bailout for the country, Bloomberg News reported on Thursday. The IMF has also said that it would “continue engagement with the government on the loan despite the ramp-up in political tensions”. The remarks came after the arrest of PTI chief Imran Khan on Tuesday sparked violent protests across the country. As for fuel subsidy, Prime Minister Shehbaz Sharif in March proposed charging affluent consumers more for fuel, with the money raised used to subsidise prices for the poor who have been hit hard by inflation. However, the government has now committed not to implement the cross-subsidy programme in the current fiscal year and beyond, an IMF spokesperson reportedly told Bloomberg. The government also would not introduce new tax exemptions and would durably allow a market-based exchange rate for the rupee currency, the lender said. The development came a day after Minister of State for Petroleum Musadik Malik said the government aimed to address IMF’s concerns before implementing its new fuel subsidy plan.