IMF agrees to Pakistan petrol subsidy but demands no new users

The International Monetary Fund (IMF) has reportedly agreed to allow Pakistan to continue its petrol subsidy scheme, provided that the number of beneficiaries is not increased. Negotiations for the fourth economic review are in their final stages, with a staff-level agreement potentially being reached this week.

During discussions with the Ministry of Finance, the Federal Board of Revenue (FBR), and the Ministry of Petroleum, the IMF mission raised several key demands. These include the deregulation of the sugar sector—contingent on provincial consent—and the removal of tax exemptions currently granted to electric vehicles (EVs) under the auto policy.

While the IMF expressed satisfaction with tax revenue progress from July to September, it emphasized the need to reduce circular debt, control losses within DISCOs, and accelerate privatization efforts. Additionally, the province of Sindh has reportedly opposed the central government's sugar policy, viewing it as an interference in provincial autonomy. If negotiations conclude successfully, Pakistan will seek approval from the IMF Executive Board for the fifth installment of its loan program.