Pakistan May Seek IMF Relief to Suspend Furnace Oil Carbon Levy

Pakistan may approach the International Monetary Fund for relief from a carbon levy imposed on furnace oil as the government seeks to secure energy supplies amid escalating tensions in the Gulf.

Speaking in an interview on Aaj News, Ali Pervaiz Malik said the prime minister has directed the finance ministry to engage with the IMF to explore suspending the levy introduced under the Fund’s Resilience and Sustainability Facility. The move would allow Pakistan to use furnace oil domestically instead of exporting it during the ongoing crisis.

The minister said the government remains committed to the IMF programme and will avoid steps that could undermine the framework. However, authorities may review non essential imports such as automobiles and consider adjustments in duties or exchange rate measures, in consultation with the IMF, to prevent pressure on the external account.

Malik warned that rising global oil prices could significantly strain Pakistan’s finances. Crude oil is currently trading between $80 and $85 per barrel. If prices rise to $100 per barrel, the country could face an additional burden of about $250 million per month. If prices reach $120 per barrel, the monthly impact could increase to $500 million.

Pakistan currently has petrol and diesel stocks sufficient for about 20 to 30 days. To secure supplies, the government has arranged alternative crude shipments from Yanbu in Saudi Arabia and Fujairah in the United Arab Emirates while coordinating with authorities to prevent hoarding and smuggling.

Two Pakistan National Shipping Corporation vessels carrying oil are stuck in the Strait of Hormuz, underscoring supply risks. Meanwhile, petrol import premiums have jumped from $5 to $17 per barrel, which could push domestic petrol prices up by about Rs. 15 to Rs. 20 per litre if the higher costs are passed on.