In the wake of IMF statement that the Fund has not been consulted on thefuel subsidy announced by the government, Minister of State for PetroleumDivision Musadik Malik has clarified that the government is not giving fuelsubsidy saying that it will increase the petrol prices for the rich andgive it to the low-income group at subsidized rate.
International Monetary Fund representative Esther Perez Ruiz told Bloombergon Monday that the Fund was not consulted on the government’s recent moveto announce a fuel subsidy, adding that it was seeking “greater details” onthe scheme.
“Fund staff are seeking greater details on the scheme in terms of itsoperation, cost, targeting, protections against fraud and abuse, andoffsetting measures, and will carefully discuss these elements with theauthorities,” Ms Ruiz told the publication.
While giving briefing to media on petrol package in Islamabad on Wednesday,the minister said that the International Monetary Fund thought that thegovernment was giving subsidy on petrol. “But we have no such progrmme. Weare not imposing any new tax. The higher petrol rate charged from the richwill be distributed among the poor,” he clarified.
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He said currently there are 26 million motorcycles and 24 million smallcars in the country. A motorcycle consumes 21 litre petrol per annum. If weadd cars, the petrol consumption becomes 460 million litre per annum.According to the proposal, a motorcycle will get a relief of Rs100/litre,while a small car will get Rs30/litre relief on petrol, he added.
The minister said that there would be Rs100/litre difference between thepetrol rates for the rich and the low-income groups.
