IMF says phase out fuel relief ‘promptly’

The International Monetary Fund has urged Pakistan to end its fuel support scheme quickly, citing high costs and wide eligibility. In a staff-level statement released on Wednesday, the Fund added that any relief needed if oil prices rise again should be narrow, temporary, channelled through existing social programmes and paid for within the FY27 budget. The request arrived a few weeks after launch, shortly following the petroleum minister's suggestion that the scheme could continue for another 10 months at a cost of Rs400bn to Rs500bn.

The government's own figures do not reconcile, according to Mettis Link News. The petroleum minister said in late September that more than six million people had registered and that spending was running at Rs35bn to Rs40bn monthly. Six million motorcyclists using their full 20-litre allowance would cost about Rs12bn a month, while the minister's count of more than 25 million bikes aged around 20 years implies Rs50bn monthly, which matches the upper Rs500bn estimate over 10 months.

At the pump, petrol sells at Rs396.65 a litre, with Rs114 of that made up of taxes and duties. The Rs100 discount brings the price for eligible riders to Rs296.65 and returns about 88% of the levy on each litre. The Rs400bn to Rs500bn outlay would amount to about a quarter or a third of the Rs1.567 trillion levy collected in FY26, as the finance ministry reported.