By Asif Shahzad

ISLAMABAD (Reuters – Pakistan declared Saturday it would continue subsidies to maintain fuel prices and power prices stable for consumers. The decision was made in direct violation of International Monetary Fund’s (IMF) recommendation as Pakistan seeks to expand its rescue package.

Monday’s IMF statement stated that Pakistan agreed to rollback unfunded subsidies to oil and power sector in advance of the next month’s review of the $6 billion package.

A proposal to increase the price of petroleum products to “not burden consumers” was rejected by Prime Minister Shehbaz Sharmaf, a statement from the finance ministry stated.

Prices are updated every 2 weeks.

Pakistan’s ex-Prime Minister Imran Khan, in his last days of power, announced that he would give subsidies totalling more than $2 billion to power and oil sector sectors.

Public pressure is being applied to electricity and fuel prices in the face of inflation that has risen by double-digits.

A mission from the IMF is expected to visit Pakistan in May in order to continue discussions on policies to complete the seventh review of Pakistan’s Extended Fund Facility.

Pakistan would receive more than $900million if the IMF review is approved. This will allow for additional funding from external sources.

South Asia’s nation faces dire financial needs due to its current account deficit growing and falling foreign reserves. This amounts to just $10.5 million, which equals less than two months worth of imports.