IMF opposes expansion of petrol subsidy scheme

Talks between the government and the International Monetary Fund (IMF) are continuing over the latest economic review, with discussions covering various fiscal matters, including health and education spending and petroleum subsidies.

Sources said the IMF has agreed to allow the government to continue its petrol subsidy scheme but has stressed that the number of beneficiaries should not be increased.

The two sides also discussed reducing subsidies on electric vehicles.

Prime Minister Shehbaz Sharif announced a special petrol relief scheme on September 13, under which a subsidy of Rs100 per litre was provided on petrol across the country.

According to sources, the proposal to reduce the target for health and education spending from Rs4.2 trillion to Rs3.9 trillion is under consideration in the IMF talks.

Health and education spending fell Rs370 billion short of the target during the last fiscal year, while provincial budget allocations for the two sectors were around Rs500 billion below the target, the sources said.

The sources said that Sindh and Punjab governments had informed the IMF that they were facing difficulties in meeting the health and education spending target due to financial pressures, while the Khyber Pakhtunkhwa government had assured the review mission that it would meet the target.