IMF Rejects Initial Proposal of Cheap Petrol Scheme – Sources

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International Monetary Fund (IMF) has seriously objected to the cheap petrol scheme and rejected the initial proposal by the government. The government has announced an Rs. 50/liter subsidy for motorcycles, rickshaws, and cars up to 800cc. As per the initial suggestion, the government has planned to increase petrol prices for car owners by Rs. 50/liter and relieve the lower-income segment of society from it. 

However, as per media reports, the lender body has raised questions, including the subsidy amount for this scheme and where it will come from. How many consumers will come under this plan? And how much loss will government face? IMF has asked Islamabad to provide a detailed proposal for the scheme. 

As per sources, a virtual meeting was held between both sides, during which IMF stressed upon preparation of the revised plan. The global body also stressed providing more targeted and effective subsidies for people experiencing poverty. 

Govt Not Consulted Us – IMF

Last week, the global lender dubbed IMF’s representative stated that Pakistan didn’t consult us regarding the petrol subsidy proposal.

Esther Perez Ruiz said, “the IMF is seeking greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities.”

The statement of IMF came after PM Shahbaz Sharif announced a new relief package for the low-income class of the country under which they will be given a petrol subsidy of Rs. 50 per liter.

“As a general matter, the IMF sees strengthening support for those eligible for social assistance through the unconditional Kafalat cash transfer scheme as the most direct way to help the neediest in Pakistan,” Ruiz added.

Meanwhile, if you want to know how the cheap petrol scheme will work, read our blog here. 

What is your take on this cheap petrol scheme by the government? Will it be implemented? Please share your thoughts in the comments section. 

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