New Delhi, April 6: The International Monetary Fund (IMF) has asked Pakistan to eliminate, at the earliest, distortions in the pricing of petroleum products due to the subsidy extended by the federal government to consumers amid the surge in global prices triggered by the Iran war, local media reports said on Monday.
A senior government official has confirmed that the IMF remains concerned about existing distortions, particularly in diesel pricing, and is pushing for their early removal, the Dawn reported. Initially, the government attempted to balance finances by adjusting the petroleum development levy (PDL) between petrol and diesel. It later moved toward targeted subsidies, now being financed by provinces through the rationalisation of their respective budgets.
The loss in PDL on diesel, currently zero compared to the Rs 80 per litre envisaged in the budget, is being offset by higher rates on petrol. However, this cushion has diminished after Prime Minister Shebaz Sharif reduced petrol prices by Rs 80 per litre on Friday, and the situation will need to be reassessed in the coming days, the report stated. (PTI)
