ISLAMABAD: Pakistan and the IMF have worked out modalities for the release of $900 million next tranche once Pakistan removes its fuel subsidies.
From Thursday midnight (May 26), the government has increased petroleum products prices by Rs30 per liter, fulfilling a major demand of the IMF for the disbursement of loan.
The talks in Qatar capital Doha on the resumption of a funding programme concluded on Wednesday (May 25).
“When the government raised the fuel prices, the deal with IMF was completed,” a government official said.
Pakistan entered a three-year, $6 billion IMF deal in 2019, but about half of the funds are yet to be released.
A pending tranche of over $900 million dollars is contingent on a successful IMF review, which would also unlock other funding avenues for cash-strapped Pakistan, whose foreign reserves cover less than two months worth of imports.
Pakistan’s fuel price caps were introduced by ousted Prime Minister Imran Khan as he faced pressure to tame rising inflation. The IMF on Wednesday said the move was a deviation from policies agreed to in the 2019 funding deal.
