Tag: financial assistance

  • Pakistan’s petrol relief proposal fails to convince IMF, causing further delays

    Pakistan’s petrol relief proposal fails to convince IMF, causing further delays

    The International Monetary Fund (IMF) has asked Pakistani authorities to provide additional information about a petrol relief package, which has caused further delays in the signing of a staff-level agreement.

    The petroleum ministry’s cross-fuel subsidy proposal was initially rejected by the Fund, which argued that more details are needed to verify its sustainability.

    The Ministry of Finance has distanced itself from the plan, which was announced without the IMF review mission’s knowledge, and has advised the Ministry of Petroleum to withdraw the proposal and work with the Ministry of Finance to iron out the policy details before approaching the IMF for the next review.

    According to The News, Minister of State for Finance, Dr Aisha Ghaus Pasha, has reportedly called the petrol subsidy plan “not workable” and clarified that there is no suggestion of subsidies on petroleum products. The Petroleum Division had suggested cross-subsidies on petroleum products, which is not feasible, she said.

    The talks with the IMF are ongoing, with the only remaining issue being the lender’s confirmation of external financing from bilateral countries, including Saudi Arabia and the UAE, which is currently underway.

    Pasha indicated that financial assistance is expected from bilateral friends soon, which will help finalize the staff-level agreement with the IMF.

  • Govt announces Rs50 per litre petrol subsidy for low-income individuals

    Govt announces Rs50 per litre petrol subsidy for low-income individuals

    The government has announced a relief package for low-income individuals in the form of a petroleum subsidy worth Rs50 per litre. This announcement was made during a meeting chaired by Prime Minister (PM) Muhammad Shehbaz Sharif on Sunday.

    The Prime Minister directed that consumers using small vehicles such as motorcycles, rickshaws, and 800-CC vehicles will be included in the subsidy scheme. He also instructed relevant authorities to finalise the scheme as soon as possible to ensure its effective implementation.

    The Prime Minister emphasized that this subsidy will provide much-needed relief to low-income individuals, as they are the primary users of small vehicles. Despite the severe economic difficulties faced by the country, the government is committed to assisting the poor in every way possible.

    During the meeting, Minister of State for Petroleum Musadik Malik briefed participants on the strategy for implementing the subsidy to low-income individuals.

  • Pakistan reaches out to US for assistance in obtaining IMF deal

    Pakistan reaches out to US for assistance in obtaining IMF deal

    Pakistan has requested assistance from the United States to obtain “lenient treatment” from the International Monetary Fund (IMF) due to a delay in signing the staff-level agreement (SLA).

    The international lender has asked Pakistan to confirm external financing needs of $6 to $7 billion from Saudi Arabia, the United Arab Emirates, Qatar, and multilateral creditors until the end of June 2023.

    However, Pakistan has been unable to persuade the lender to sign the agreement and has requested assistance from Washington and its western allies.

    According to The News, Minister for Finance Ishaq Dar has contacted the US diplomatic corps based in Islamabad for help in ending the stalemate.

    The IMF considers that the loan facility’s “sustainability” could not be guaranteed without full assurance of external financing.

    Furthermore, the IMF has demanded a permanent abolition of power sector subsidies, which the government had only committed to until the end of the next financial year 2023-24.

    The IMF demanded changes in the wording of the Memorandum of Economic and Financial Policies (MEFP) during the last meeting held in the previous week.

    The IMF and Pakistani sides are yet to decide on further proceedings, with each side holding the other responsible for the delay in signing the SLA.

  • World Bank to provide Pakistan $22.2 million in financial support for flood-affected farmers

    World Bank to provide Pakistan $22.2 million in financial support for flood-affected farmers

    In an attempt to help Pakistan’s flood-affected farmers, the World Bank will provide financial support of $22.2 million.

    A delegation led by the World Bank’s South Asia Regional Director for Sustainable Development, John A Roome, met with the Federal Minister for National Food Security and Research, Tariq Bashir Cheema.

    The discussion at the meeting focused on the farmer community and food security, as well as the rehabilitation and relief operations in the flood-affected areas.

    According to the minister, rain and flooding have wreaked havoc on the agricultural industry and destroyed the farming community. In order to restore normalcy, he claimed that at this crucial moment, all attention is being paid to restoration efforts in the flood-affected districts.

    He mentioned the government’s intention to provide subsidies for fertiliser and seeds to help the impacted farmers. According to the idea, the federal government will cost-share with the provinces to give farmers discounted inputs for the upcoming Rabi season.

    “We plan to provide subsidized wheat and edible oil seeds, and one fertilizer bag per acre to farmers in the calamity-hit areas,” he said.

    Provincial governments and the National Disaster Management Authority will handle the disbursement. He believed that with this support, farmers will be able to stand up again.

    According to John A. Roome, the World Bank would assist Pakistan by funding initiatives aimed at rebuilding the devastated neighbourhood. He consented to assist the World Bank’s Locust Emergency and Food Security (LEAFS) initiative in rehabilitating the farming community in the afflicted districts and locust-stricken regions. He said that the World Bank is assisting the farming community by collaborating with provincial agriculture agencies.

    He stated that he would ask the World Bank Group Board to extend aid to Pakistan as it attempts to recover from the damage brought on by unheard-of floods. The minister also praised the World Bank Group’s support at a time when assistance was most needed for the country.