KARACHI / ISLAMABAD — The International Monetary Fund (IMF) has once again told Pakistan to phase out its petrol subsidy for motorcyclists, rickshaw drivers and small car owners, and warned that any future fuel support must be limited, time-bound and paid for within this year’s budget. “The fuel support scheme should be phased out, given its broad targeting,” an IMF spokesperson.
IT Minister Shaza Fatima played a key role in helping develop and implement the Rs 75 billion digital fuel subsidy program. Prime Minister Shehbaz Sharif last month also announced a Tamgha for her on March 23 for her role in implementing the subsidy. If oil prices surprise on the upside again, IMF wants any new relief targeted through established social assistance programs and accommodated within the FY27 budget envelope.
What Is at Stake for Motorists The scheme, launched in September amid the US-Iran war, gives motorcycle and rickshaw users a weekly petrol token worth Rs 500. Owners of cars up to 800cc get Rs 100 off per liter on up to 10 liters every 10 days. The government recently extended the fuel subsidy till December but IMF doesn’t want it to last any longer.
Petrol hit a record Rs 458.41 per liter on April 3 and has since eased to around Rs 330. Under the loan program, Pakistan has committed to let domestic fuel prices follow international rates while protecting the most vulnerable. $1.2 Billion Riding on IMF Board IMF warned that the Middle East war remains a significant headwind for Pakistan given its reliance on Gulf oil and gas, and that sustained volatility could weigh on the outlook.