Pakistan Signals IMF It May Raise Fuel Prices if Savings Fall Short

Pakistan has told the International Monetary Fund that current relief on petrol and diesel will remain temporary unless the government can carve out additional fiscal space to sustain it. The assurance came as inflation rose to 7.3% in March, the highest level in 17 months, driven largely by fuel, electricity and gas costs.

According to the report, Islamabad said it would permit regular fuel price adjustments if budget savings were not enough to keep pump prices unchanged. Officials also indicated that the government was exploring support from provinces and reallocations within the federal budget to preserve short-term relief while avoiding a wider fiscal imbalance.

The article said the IMF had also linked social protection to the energy-price challenge, asking Pakistan to raise the quarterly Benazir Income Support Programme stipend by 35% to Rs19,500 from January next year. Authorities believe that would cushion the poorest households, though the report noted that broader middle-income groups would still remain exposed to the impact of higher utility and fuel costs.

Officials maintained that fuel supplies were stable because of better management by the petroleum ministry, but acknowledged that the finance side remained under pressure to secure both fiscal room and foreign exchange. The article added that the government was still weighing whether part of the burden should be passed on to consumers in the coming price revision.