New Delhi, April 6 (NationPress) The International Monetary Fund (IMF) has urged Pakistan to swiftly address the pricing irregularities in its petroleum products caused by government subsidies to consumers. This request comes in light of rising global oil prices, exacerbated by the conflict in Iran, as reported by local media on Monday.

A high-ranking government official confirmed the IMF's concern over the current pricing discrepancies, especially regarding diesel, and emphasized the need for their prompt resolution, according to the Dawn.

Initially, the Pakistani government sought to stabilize its finances by adjusting the petroleum development levy (PDL) between petrol and diesel. Eventually, it shifted to targeted subsidies, funded by provincial budgets.

Currently, the PDL loss on diesel stands at zero, while the budget anticipated a rate of Rs 80 per litre. This loss is partially compensated by higher petrol prices. However, following Prime Minister Shebaz Sharif's decision to cut petrol prices by Rs 80 per litre last Friday, this financial buffer has diminished, indicating a need for reassessment in the near future, the report states.

Increased petrol consumption has somewhat mitigated the drop in diesel PDL, with petrol averaging around 660,000 tonnes per month versus diesel's 600,000 tonnes. However, diesel demand is predicted to rise during the ongoing harvest season.

Officials have stated that the current fiscal year's economic indicators align broadly with the IMF's program targets. However, significant revisions will be necessary in the macroeconomic framework for the next year, which will be finalized in coordination with the IMF before the federal budget for 2026–27.

They also mentioned that the petroleum differential claims from the oil industry have surpassed Rs 129 billion but have ceased following recent price hikes that fully accounted for import costs. Payments to oil firms and refineries are currently being made with a 10% retention rate, pending audit confirmation, as per the report.

The Dawn cited senior officials indicating that the staff-level agreement disclosed by the IMF on March 29 remains intact, and that the federal petroleum subsidy of Rs 152 billion was established with the Fund's prior awareness.

Sources informed the Dawn that Finance Minister Muhammad Aurangzeb and his team will brief IMF management on provincial contributions to the petroleum subsidy during the upcoming spring meetings of the IMF and the World Bank next week. Nonetheless, the IMF continues to oppose blanket subsidies on major petroleum products.