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KARACHI: Pakistan has met the last requirement of the International Monetary Fund for the combined seventh and eighth review of the $6 billion loan facility, with the increase in the petroleum development levy on July 31, the global lender’s representative to the country said on Tuesday.

“The board meeting is tentatively planned for late August once adequate financing assurances are confirmed,” IMF Representative to Pakistan Esther Perez told Aaj News.

The development was expected to pave the way for the release of the first tranche of over $1 billion. The breakthrough came on June 22 when the IMF and Pakistan confirmed that important progress was made in the talks for the revival of the loan programme.

Pakistan would meet one remaining prior condition of the IMF for the bailout package tomorrow (August 1), Finance Minister Miftah Ismail said while addressing a press conference on July 31.

The development came after the government announced an increase in diesel price while reducing that of petrol. The government on Sunday night decreased the price of petrol by Rs3.05 per litre, while the price of high-speed diesel was increased by Rs8.95 per litre, owing to the fluctuation in fuel prices in the international market.

Petroleum development levy as of July 31

  • Rs20 on petrol
  • Rs10 on High-Speed Diesel
  • Rs10 on Kerosene
  • Rs10 on Light Diesel Oil

It follows a flurry of developments where foreign media reported that Chief of Army Staff General Qamar Bajwa has sought US intervention for the early release of the $1.2 billion from the IMF that Pakistan is due to receive under a resumed loan programme. Moreover, Moody’s Investors Service and Fitch Ratings had also expressed that Pakistan would secure the loan amid a delay in the release.

The government was expected to get $4 billion over the next year from the IMF. The staff-level agreement would envisage the programme to extend for another year and also augment the amount by a billion dollars.

Prior conditions of IMF included:

  • Passing of the budget
  • Signing of MOUs
  • Increasing petroleum levy, power tariffs, and some other conditions regarding interest rates
  • Long-term financing facility and export financing scheme

Miftah last month said that during talks with the IMF, the government had suggested forming a diagnostic analysis of anti-corruption laws in Pakistan.

The IMF team reached a staff-level agreement and the Pakistani authorities on policies to complete the combined 7th and 8th reviews of Pakistan’s Extended Fund Facility on July 14. But, the agreement is subject to approval by the executive board.

“The agreement is subject to approval by the IMF’s Executive Board,” it said in a statement. “About $1,177 million (SDR 894 million) will become available, bringing total disbursements under the program to about $4.2 billion.”

The global lender had asked Pakistan to steadfast implementation of the budget, catch up in power sector reforms, reduce poverty and boost social safety, and strengthen governance.