Minister of State for Petroleum Musadik Malik on Tuesday said that the government remains committed to addressing the International Monetary Fund (IMF) concerns on the recently announced petroleum subsidy scheme.
Talking to Bloomberg, Malik discussed the country’s energy transition, debt crisis and fuel discount plan announced by the government.
“We originally thought that it (petrol subsidy scheme) was a much simpler idea, because previously when we were negotiating with the IMF and the bank was also supporting the negotiations, we put together a plan in which we charged a higher price for natural gas to the rich and lower price to the poor, so, in essence, we were subsidising the poor but charging a little bit more to the rich,” said Malik.
“Our proposal is exactly trying to do the same thing we did to the gas sector, and we thought we would charge the rich (consumers) a lit bit more, and the poor people would be given a little bit of relief,” he said.
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On the reservations of the IMF, the minister said that the government remains “open to sit with them (IMF)” and satisfy their concerns.
“With our petroleum scheme, we saw that IMF had some queries and concerns, so we want to make sure, that if we move forward, we take care of their concerns and make sure that they (IMF) completely understand what we are trying to do and why,” he added.
The remarks come as Pakistan remains engaged with the Washington-based lender to resume its bailout programme that has been stalled at the ninth review since November last year.
Various measures including a floating exchange rate, additional taxes, and hike in energy tariffs have failed to convince the IMF to resume the bailout.
The minister said that the government “was able to take care of circular debt“.
“Right now there is a zero contribution to the circular debt, so we have ceased the flow of circular debt,” he said.
On the upcoming elections, the minister said he expects elections would take place towards the end of the current year.
“The term, if this current administration finishes around in October, that’s exactly the end of the 5-year term and the elections would take place exactly on time,” he said.
The minister admitted that inflation remains “high”.
“But it (Pakistan) was flirting with extreme economic difficulties when we took over, so we have been pushing the envelope and I think we are trying to restructure the economy as we go along. So we are reasonably confident that as we move forward we will be able to provide a little bit of relief,” said Malik.