Reporting snapshot · 11 October 2026 (Asia/Karachi). Finance Minister Muhammad Aurangzeb told journalists on the margins of the International Poultry Expo 2026 in Lahore on Sunday that he was unaware of the IMF's call to phase out Pakistan's fuel subsidy scheme, despite the Fund's 7 October press release announcing a staff-level agreement on the fourth review of the Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF), which said the fuel support scheme "should be phased out promptly". The Pakistan finance ministry has not, at the time of writing, responded to a request to clarify whether the Fund has raised the issue in formal review correspondence, and the IMF has not commented publicly on the exchange.
What Aurangzeb said on Sunday
Speaking briefly to The Express Tribune at the International Poultry Expo 2026 in Lahore on 11 October, Finance Minister Muhammad Aurangzeb expressed ignorance about the IMF’s concerns over Pakistan’s fuel subsidy scheme, calling targeted subsidies the way forward and saying the scheme would continue to benefit vulnerable segments of society, The Express Tribune reported.
Asked specifically about the IMF’s position, Aurangzeb questioned where the media had heard about the objection. When told that the information had been officially issued by the IMF and reported by mainstream media, he suggested that the Fund might have conveyed its concerns but said he had not been informed by them, the newspaper added. In a subsequent interaction meant to clarify the matter, Aurangzeb reiterated that the targeted subsidy had been successful and had reached about 10.2 million people.
The exchange is significant because it comes four days after the IMF published a 7 October 2026 press release that explicitly recommended phasing out the fuel support scheme, raising questions about whether the finance ministry was aware of the Fund’s position when it agreed to the staff-level agreement that cleared $1.21 billion in disbursements for board approval.
What the IMF press release actually says
The IMF’s 7 October 2026 press release announcing the staff-level agreement on the fourth review of the 37-month Extended Fund Facility and the third review of the 28-month Resilience and Sustainability Facility included the subsidy recommendation under the heading “Prioritising Social Spending”. The relevant text, as published by the IMF, says:
Recommendation: phase out the fuel support scheme promptly given its high cost and broad targeting. Any future fuel support—should oil prices surprise on the upside—should be limited, timebound, targeted using established social assistance programs, and accommodated within the FY27 budget envelope.
The press release also says the Fund’s team, led by Iva Petrova, held discussions in Karachi and Islamabad from 23 September to 7 October 2026, “express[ing] gratitude to the Pakistani authorities, private sector, and development partners for hospitality and fruitful discussions.” KhabarWire’s earlier 8 October account of the staff-level agreement noted that the package unlocks about $1.21 billion in disbursements once the IMF Executive Board approves.
What Aurangzeb said about the scheme
At the poultry expo, the finance minister said the prime minister had told an audience the day earlier that around 10 million people had benefited from the subsidy scheme, The Express Tribune reported. The recipients included users of Qingqi rickshaws, other three-wheelers, motorcycles and cars with engines below 800cc.
Assuming an average household size of five people, Aurangzeb said, the scheme’s benefits could extend to around 50 million people, and the programme would continue to support vulnerable and deserving segments. Asked why the government had not announced smart lockdowns to conserve fuel stocks and reduce the rising fuel import bill, as it had done previously when domestic fuel prices exceeded Rs400 a litre, the minister said targeted subsidies had made such lockdowns unnecessary.
Why the exchange matters for the programme
The IMF’s “phase out promptly” recommendation sits inside a wider set of conditions for the fourth EFF review that the Fund says were met to conclude the staff-level agreement. The Fund’s macro scorecard for FY26 included real GDP growth of 4 per cent in the first three quarters, headline inflation of about 10.3 per cent in September, a broadly balanced current account supported by strong remittances, and gross reserves of about $21.5 billion by end-September.
The IMF’s 7 October release was published after the Fund’s mission to Pakistan, and the fuel subsidy recommendation was a public record before the staff-level agreement was announced. Any Pakistani commitment to keep the targeted subsidy in place, the position Aurangzeb reiterated on Sunday, would therefore have to be reconciled with the Fund’s published recommendation — either through a future revision of the subsidy framework in the FY27 budget envelope or through a clarification of how the targeted version meets the Fund’s test of being “limited, timebound” and routed through established social assistance platforms such as the Benazir Income Support Programme.
What is still uncertain
Three points remain unresolved. First, the finance ministry has not, in response to The Express Tribune, produced a record of any formal correspondence between the IMF and Pakistani authorities on the fuel subsidy since the 7 October press release, and the Fund’s resident representative office in Islamabad has not commented publicly on Aurangzeb’s remarks. Second, the IMF Executive Board has not yet fixed a date to consider the fourth EFF and third RSF review; the staff-level agreement is conditional on board approval before the $1.21 billion in disbursements can be released. Third, the government has not signalled whether it intends to revise the fuel subsidy framework in the remaining months of the FY27 budget to address the Fund’s “phase out promptly” recommendation, or whether it will seek to keep the targeted scheme and reframe its coverage in response.
Sources & reporting notes
This is a synthesis of published reporting and the IMF's own primary record, not eyewitness reporting. The finance minister's 11 October remarks are drawn from The Express Tribune's interview at the International Poultry Expo 2026 in Lahore. The IMF's published position on the fuel subsidy is taken from the Fund's 7 October 2026 press release on the staff-level agreement. The earlier KhabarWire coverage of the staff-level agreement and the central data centre is linked for context. Sources were reviewed on 11 October 2026 (Asia/Karachi).
- Primary source — The Express Tribune: "FinMin unaware of IMF fuel subsidy objection"Published 11 October 2026 · Finance Minister Muhammad Aurangzeb's brief exchange with The Express Tribune at the International Poultry Expo 2026 in Lahore, in which he expressed ignorance about the IMF's call to phase out the fuel subsidy and reiterated that the targeted scheme has benefited around 10.2 million people.
- Primary source — International Monetary Fund: "IMF Staff Complete the 2026 Article IV Consultation and Reaches Staff-Level Agreement on the Fourth Review for the Extended Fund Facility and the Third Review for the Resilience and Sustainability Facility for Pakistan"Published 7 October 2026 · The IMF's published recommendation under "Prioritising Social Spending" that the fuel support scheme be phased out promptly given its high cost and broad targeting, and that any future fuel support be limited, timebound, targeted using established social assistance programmes and accommodated within the FY27 budget envelope.
- Independent source — The Express Tribune: "PSX gives up gains despite IMF deal"Published 11 October 2026 · Independent market reporting that same day confirming that the Fund "urged the government to phase out fuel subsidies, broaden the tax base and ensure timely energy tariff adjustments" in the same staff-level agreement Aurangzeb questioned on Sunday, with quotes from JS Global analyst Wadee Zaman.
- Context — KhabarWire: "Pakistan, IMF reach staff-level agreement on fourth review"Published 8 October 2026 · KhabarWire's earlier account of the 7 October staff-level agreement, the $1.21 billion in EFF and RSF disbursements contingent on Executive Board sign-off, and the macro scorecard (4 per cent FY26 growth, 10.3 per cent September inflation, $21.5 billion reserves, broadly balanced current account).
- Context — KhabarWire: "PM Shehbaz orders federal ministries to feed Pakistan's central data centre"Published 9 October 2026 · KhabarWire's explainer of the 8 October Digital Nation Pakistan Programme review, including the prime minister's framing of the central data centre as the working data backbone of the targeted fuel subsidy and the IMF's call to phase it out without losing targeting accuracy.
