The International Monetary Fund’s (IMF) resident representative in Islamabad, Esther Perez Ruiz, said on Monday that policy commitments made by the government to resume the support programme continue to apply.

“Policy commitments made by the Pakistani authorities as part of the seventh and eighth reviews under their IMF-support programme continue to apply,” she told Reuters.

She said policy discussions, including how to target support to those affected by the floods while maintaining macroeconomic stability, will commence in the coming weeks after the damage assessment report becomes available.

The IMF official made the comments in response to a question if the recent reduction in fuel prices had been discussed with the lender.

The international lender’s statement comes after the Finance Minister Ishaq Dar, who took over the reign from his party member Miftah Ismail as the finance czar last week, reduced the prices of all petroleum products for the next fortnight by around five per cent — reversing a policy of raising prices monthly through added levies to ensure enhanced revenues as agreed with the IMF.

Dar said imposing additional levies was not justified as the country struggled with catastrophic floods that have killed more than 1,600 people and inflicted at least $30 billion in damages.

“I have been dealing with the IMF for the last 25 years; I will deal with it,” he said, referring to any potential reservations by the lender.

Dar’s statement had come in response to his predecessor’s criticism, who termed the move to slash fuel prices by reducing levy sans IMF approval as “reckless”.

Dar responded by advising Ismail not to worry as he knew how to deal with the international lender.

“Maybe Miftah sahab was comfortable (in burdening the public). But I’ve been dealing with the IMF for 25 years. I’m the only humble person who’s completed an IMF programme. Miftah sahab or anyone else sho­uldn’t worry… it’s betw­e­en me and the IMF,” he said during an interview on Geo News.

Dar said Ismail should simply call him to seek clarity instead of making public statements. “He should’ve called me. I would’ve told him that’s Solution No 1, that’s Solution No 2 and that’s Solution No 3,” he advised Ismail, a PhD economics from the University of Pennsylvania, in a patronising tone.

“Prime Minister Shehbaz Sharif himself told me that during the United Nations General Assembly session, where Miftah was also present, that he proposed IMF officials freeze taxes to which they did not refuse,” Dar added.

IMF deal and PDL

Under the deal with the IMF, the government had to gradually increase the PDL on petroleum products to a maximum of Rs50 per litre to collect Rs855 billion during the current fiscal year.

The previous PTI government had committed a monthly PDL increase of Rs5 on petrol and HSD until it reached Rs50 in January for petrol and April for diesel.

However, before the former prime minister’s ouster, he reduced the PDL to zero on March 1. As the international prices went up, the PTI government not only reduced the petroleum prices by Rs10 per litre but also froze them for the next four months.

After coming to power in April, the PML-N-led coalition government refrained from increasing the prices immediately. However, since May 15, the government has been increasing the prices in line with the IMF deal. As Pakistan battled with the flood catastrophe, the government had requested the IMF managing director for a three-month freeze on the PDL and fuel cost on electricity.

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Free, fair & timely
Updated 01 Jun, 2023

Free, fair & timely

The stakeholders need to take a step back and let democracy take its course.
Virtual SCO summit
01 Jun, 2023

Virtual SCO summit

HOSTING multilateral summits is a matter of great prestige for states, as world leaders gather at the same table to...
Missing anchorperson
Updated 01 Jun, 2023

Missing anchorperson

IT gives insight into the obduracy of those in whose custody Imran Riaz Khan is being held that multiple appeals ...
Constitutional courts
Updated 31 May, 2023

Constitutional courts

While the idea may not be without its merits, the establishment of a constitutional court cannot be done without national consensus.
Hunger pangs
31 May, 2023

Hunger pangs

A RECENTLY released report by two UN agencies should serve as a wake-up call to the ruling elite — that is, if ...
No-Tobacco Day
31 May, 2023

No-Tobacco Day

DESPITE successive governments’ efforts, tobacco use continues to remain a significant public health challenge for...