Petrol, diesel levy to be increased Rs50/L under IMF condition

Journalist Ali Khizer has said that under the conditions of the International Monetary Fund (IMF), petroleum levy to be hiked up to Rs50 per litre on petrol by January 23 and on diesel by April 23.

In a Twitter thread, Ali Khizer wrote that the IMF pending review was done and the story was about to begin. The staff-level agreement was a broad required outline but detailed and stringent conditionalities are in the MEFP which would be needed by the government for taxes.

He said that the State Bank of Pakistan (SBP) could not intervene to maintain exchange rate beyond certain level. He added that $4 billion in commitments from friendly countries is required before the board meeting. Khizer said that the import ban will be removed and rebasing process of electricity tariff will be started immediately and industry subsidy on electricity will be ended.

IMF pending review is done. The story is about to begin. SLA is the broad required outline but detailed and stringent conditionalities are in MEFP. Implementing those would be taxing for the govt
Such as:
SBP cannot intervene to maintain exchange rate beyond certain level
1/

— Ali khizar (@AliKhizar) July 14, 2022

Pakistan-IMF agreement

The International Monetary Fund (IMF) and Pakistan signed an agreement for the disbursement of another tranche of loans to the crisis-hit country under tough conditions which will be a test case for the coalition government.

Pakistan will receive $1.17 billion subject to board approval of IMF followed by the release of total disbursement worth $4.2 billion.

IMF-Pakistan agreement: Is govt able enough to implement conditions?

IMF staff and the Pakistani authorities have reached a staff-level agreement on policies and an agreement reached for combined 7th and 8th reviews of Pakistan’s Extended Fund Facility (EFF).

The agreement is subject to approval by the IMF’s Executive Board.

The immediate priority is to stabilise the economy through the steadfast implementation of the recently approved budget for FY23, continued adherence to a market-determined exchange rate,

Pakistan needs a proactive and prudent monetary policy. It is important to expand social safety to protect the most vulnerable and accelerate structural reforms including improving the performance of state-owned enterprises (SOEs) and governance.

It was learnt that the IMF loan package was now standing at $7 billion. The loan program was scheduled to end in September 2022 which is now extended till June 2023.

Pakistan and IMF had signed an agreement in July 2019 for $6 billion and the country has so far received $3 billion.

Following the IMF board approval, Pakistan will get $1.17 billion and the total disbursement from the global financial institution will reach $4.2 billion.

In its remarks, the financial institution urged the Pakistani government to focus on improved accountability measures and strengthened governance.

To improve governance and mitigate corruption, the authorities are establishing a robust electronic asset declaration system.

Pakistan has also planned to undertake a comprehensive review of the anti-corruption institutions, including the National Accountability Bureau (NAB) to enhance their effectiveness in investigating and prosecuting corruption cases.