Month: May 2022

Amid rising oil consumption and import bill owing to higher international prices, the government is examining the possibility of fuel conservation through reduced working days a week. It hopes to save an estimated annual foreign exchange of up to $2.7 billion. The estimates are based on three different scenarios in terms of working days and fuel conservation prepared by the State Bank of Pakistan for foreign exchange saving of $1.5bn to 2.7bn. Pakistan’s total oil import during the first 10 months (July-April) of the current fiscal year (FY22) has gone…

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Marred by unusual low inflows in summer months, Tarbela Dam on Indus River may hit rock bottom early next week, further worsening the water shortage in the plains. Given the present pattern of low flows into Indus River, it is feared that the water level at Tarbela Dam may attain dead level by May 25, 2022. Such an eventuality will further squeeze flows downstream and curtailing drinking water supplies, further adversely affecting the standing crops as well. This year, on March 20, 2022, water storage in the Tarbela Dam also…

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World Bank (WB) has warned the government that Pakistan will lose a part of FY 23 funds from International Development Association (IDA) for not completing Prior Actions (PAs) under second Resilient Institutions for Sustainable Economy (RISE-II). The Bank conveyed this message to Finance Minister Miftah Ismail in a letter dated subsequent to his recent meeting with the Bank’s Vice President South Asia Region, Hartwig Schafer which was also attended by Aisha Ghaus Pasha, State Minister for Finance and Revenue, and Dr. Murtaza Syed acting State Bank of Pakistan Governor, Secretary…

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The enthusiasm with which the federal government has declared a ban on luxury imports to deflate the import bill is absent in their ‘weak-kneed stance’ on reversing the fuel subsidies, which is equally critical not only to ease pressure on the economy, but also for the resurrection of a half-dead IMF loan programme. Will this import ban deliver the same goods on the ground as it does on paper? There are claims that this clampdown will help the country cut the import bill by $6 billion on an annual basis.…

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The International Monetary Fund (IMF) has estimated that Pakistan requires Rs1,416 billion in subsidies for keeping the POL prices unchanged on an annual basis at the prevalent existing prices in the international market, so Islamabad will have to reverse fuel subsidies for achieving fiscal prudence. On electricity, the government requires subsidy of Rs139 billion on per annum basis. The IMF raised objections over breach of continuous performance criteria under the $6 billion Extended Fund Facility (EFF) where Islamabad was bound that it would not “impose or intensify import restrictions for…

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