PM Sharif says IMF doesn’t trust Pakistan government, bailout deal in next few days

Pakistan's Prime Minister Shehbaz Sharif (C) addresses the members of the media before attending a hearing outside the Supreme Court building in Islamabad on April 5, 2022. (AFP/File)
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Updated 23 June 2022
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PM Sharif says IMF doesn’t trust Pakistan government, bailout deal in next few days

  • Pakistan has been desperately seeking to revive a $6 billion loan from the IMF
  • Pakistan’s problems won’t be solved overnight after agreement with IMF, Sharif says

ISLAMABAD: Prime Minister Shehbaz Sharif said on Thursday the International Monetary Fund (IMF) did not trust Pakistan, blaming the previous government for violating the terms of the lender’s previous agreement with Pakistan. 

Pakistan has been desperately seeking to revive a $6 billion loan from the IMF after the Fund objected to former prime minister Imran Khan’s move to provide massive subsidies to the oil and power sectors in February. The move on Khan’s part was to offset the impact of surging inflation.

Faced with little choice, the new Sharif government has increased prices of petroleum products over the last couple of weeks to get approval from the Fund for the latest tranche of bailout funds. 

Speaking to senators of his ruling Pakistan Muslim League-Nawaz (PML-N) party on Thursday, Sharif lamented the last government’s decisions that violated the agreement with the IMF. 

“The IMF was adamant— [it told the government] to fulfill all the terms of the agreement and we do not trust [Pakistan],” said PM Sharif.

“They [Khan government] agreed to those terms, signed off on them and then destroyed it. So now, the IMF is saying to us, ‘How can we trust you, you’re also the Pakistan government.’” 

Sharif said Pakistan and the IMF had almost reached an agreement, adding that if the Fund did not impose any new conditions on Pakistan, the agreement would be finalized in the next couple of days. 

However, the PM said Pakistan’s agreement with the IMF would not solve the country’s problems overnight. 

“We have to stabilize our financial position,” he said. “This was a very difficult phase for us and I want to tell you further, that there will be more difficulties [in future].”


Fuel surcharge, airspace disruptions push up airfares for Pakistani travelers

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Fuel surcharge, airspace disruptions push up airfares for Pakistani travelers

  • Airlines add $20–100 fuel surcharge per leg amid global oil supply disruptions due to the Middle East conflict
  • Travel agents say around 80 daily flights to Gulf countries are being canceled, increasing the demand further

ISLAMABAD: Airlines operating in Pakistan have imposed additional fuel surcharges on tickets as jet fuel prices rise and regional airspace disruptions reduce availability of flights, industry officials said on Wednesday.

Jet fuel this month surged in Pakistan from ₨188.93 to ₨342.32 per liter, according to local media reports. It followed global oil and airspace disruptions amid ongoing United States-Israeli strikes on Iran and Tehran’s counterattacks in the Gulf.

Aviation fuel typically accounts for 30–40 percent of an airline’s operating expenses, which means the recent price surge has significantly affected the cost for Pakistani carriers, according to industry experts.

Abdullah Hafeez, a spokesman for the Pakistan International Airlines (PIA), said air carriers have not formally increased base ticket prices but have introduced a fuel surcharge to offset the impact of higher aviation fuel costs.

“Airlines have imposed a fuel surcharge to the tune of $20 to $100 per leg on domestic and international flights to mitigate the effects of jet fuel price increase, which means a two-way ticket will be expensive by $40 to $200, depending on distance and route,” he said.

The decision was taken on Monday following a rise in jet fuel prices in Pakistan, according to Hafeez.

For flights to Saudi Arabia, including Riyadh, Dammam, Jeddah and Madinah, airlines have imposed a fuel surcharge of $50 per leg, meaning $100 for a return ticket, while $75 dollar per leg charges have been imposed on flights to London.

Travel agents say the impact is already being felt by passengers as ticket prices climb and flight options shrink.

Muhammad Sajjad Bashir, a representative of Aroma Travels in Karachi, said fares across airlines have risen since the Middle East crisis disrupted several regional air routes.

“The fuel price has gone up while the seats are also not available due to increased demands on some open routes,” he said.

Nearly 80 flights from Pakistan to Gulf countries, particularly the United Arab Emirates, Qatar and Bahrain, are being canceled daily due to airspace disruptions, Bashir said.

“This airspace issue has left passengers with fewer options and the increasing demand is hiking ticket prices,” he added.

Fares on some UK-bound flights have jumped from around Rs250,000 ($891) to as high as Rs1 million ($3565), while ticket prices between Pakistan and Saudi Arabia have increased from Rs125,000 ($445) to around Rs200,000 ($713), according to Bashir.

Airlines have raised fares by Rs10,000 ($35) to Rs28,000 ($99) per ticket depending on the destination, with flights to the Middle East and Central Asia seeing increases of about Rs15,000 ($53). Long-haul routes like Pakistan to Toronto and Manchester have recorded the highest hikes, with ticket prices rising by up to Rs28,000 per passenger.

A marketing official at a Saudi airline also said airlines have not officially raised base fares but are selling seats across different booking classes, meaning passengers booking late have to buy more expensive tickets once cheaper fare categories are sold out.

One-way fares from Pakistan to some Saudi destinations currently range between Rs87,000 and Rs88,000 ($310-313), while return tickets cost around Rs160,000 to Rs165,000 ($570-588), the official added.