The International Monetary Fund (IMF) has recommended that Pakistan avoid providing broad petrol subsidies to the general public. Instead, the global lender suggests that any fuel subsidies should be targeted exclusively at low-income households to prevent further economic strain.
In a significant development, the IMF has proposed increasing financial aid through the Benazir Income Support Programme (BISP) by Rs5,000, rather than lowering petrol prices across the board. Beneficiaries of the BISP are expected to receive Rs19,500 starting January 2027, reflecting the IMF’s guidance. The federal government has committed to enhancing BISP funding and stipend payments accordingly.
Meanwhile, after discussions with the IMF, the government has postponed the planned Federal Excise Duty (FED) on fertilisers and agricultural inputs. Officials believe that direct cash transfers will offer more effective relief to vulnerable groups facing rising inflation.
In related global economic news, oil prices surged nearly 7% following remarks by U.S. President Donald Trump. He stated that the United States would continue its attacks on Iran without specifying an end date for the conflict, heightening concerns over ongoing supply disruptions. Brent crude futures increased by $6.84, or 6.8%, reaching $108 per barrel by 0643 GMT, while U.S. West Texas Intermediate crude rose $6.40, or 6.4%, to $106.52 per barrel. These gains came after an earlier decline of over $1 in both benchmarks before Trump’s televised address.
