Esther Perez Ruiz, the International Monetary Fund (IMF) representative, said that Pakistan had fulfilled the last requirement for reviewing the combined 7th and 8th tranche of funds by increasing the petroleum development levy (PDL) on 31st July 2022. She said that the (Executive Board) meeting is expected to be held at the end of August
after the assurance of financing.
Pakistan and IMF have signed an Extended Fund Facility (EFF) for $ 6 billion in 2019, and the PTI government had a commitment to IMF in December 2021 to raise it to RS.4 per liter in PDL monthly to raise it to RS.30 but not implemented.
Finance Minister announced a fall of RS.3.05 per liter on petrol while the price of kerosene & high-speed diesel (HSD) has increased by RS. 4.62 per liter and RS. 8.95 per liter, respectively. The PDL on petrol has risen by RS.10 whereas RS. 5 levied on Light Diesel Oil (LDO) and HSD. The government has increased the PDL to RS.15/L on all petroleum products for uniformity at the beginning of August 2022. It has to raise RS.50/L on all petroleum products for the collection of RS.855 billion by the end of 2023.
OGRA recommended increasing the petroleum levy up to RS.10 and decreasing the price by RS. 13.05 per liter. Still, the government has not accepted and raised it to RS.20 per liter and has a reduction of only RS.3.05 per liter. The government has rejected the OGRA suggestion of RS. 217.19 per liter and announced prices at RS.227.19 per liter.
OGRA had suggested a price of RS. 239.95/L with a rise of RS.3.95/L in HSD, but the government announced a price of RS.244.95/L with an increase of RS. 8.95 per liter from 1-15 August 2022. Suggestion by the regulator for the price of kerosene oil at RS. 196.07 per liter but decided RS. 201.07 with a rise of RS.4.62 per liter. The price of LDO has also been raised by levying PL from RS. 5 to RS.10 per liter. Prices of LDO have decreased by RS.0.12 against the suggestion to reduce by RS. 5.12 per liter.
On 13th July 2022, IMF decided to review the combined 7th & 8th tranche for the EFF. The release of both tranches of 1.7 billion from the $6 billion loan program for Pakistan is expected soon. If recommendations send before 6th August, the Board Executive meeting can be held before 20th August. After the approval of the Board,$ 1.7 billion will be available & total disbursement will be $ 4.2 billion. IMF’s Executive Board will consider increasing the EFF to $7 billion by 2023 due to high financing needs. IMF asked Pakistan to make sure the release of a $ 4 billion loan from Saudi and UAE.
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