Pak Minister contrasts country's oil shock with India's stability

Pakistan petroleum minister Ali Malik has contrasted the crippling fuel crisis in his country with the situation in India, revealing why New Delhi was able to cushion the impact of the steep rise in global prices amid the Iran war.In an interview to a local news channel, Malik said that India maintains strategic oil reserves and has sufficient forex reserves to cushion the impact while Pakistan is under strict bailout conditions imposed by International Monetary Fund (IMF).
"India doesn't just have 600 arab dollars worth of reserves but they also maintain strategic reserves. This helps them cushion this crisis. Also, they are not part of IMF programme and they tried to insulate themselves by reducing taxation as oil prices soared ... they had the fiscal space to that," he said. He said that Pakistan had to engage in hectic backchannel talks with IMF to extend relief of the rising oil prices to the people.
"Whereas, in Pakistan, during our Budget, we decided with IMF and other donor agencies that we will charge levy on diesel and petrol to curtail our losses. Now, with diesel prices rising up to 3-4 times, we decided to reduce the levy to zero on diesel and shift the entire burden to petrol while protecting motorcylists by giving them targeted subsidy. However, had we broken our committment with IMF and increased our losses, the consequences would have been worse. We conducted backchannel negotiations with IMF and convinced them to reduce levy by Rs 80 per litre," he said.
Petrol and diesel prices in India have remained stable despite the ongoing war. The Centre had earlier cut central excise duties on petrol and diesel by around Rs 10 per litre each, effectively subsidising oil marketing companies that were running losses due to oil price rise. At the same time, India relied on its large foreign-exchange reserves, diversified crude-import sources and used existing strategic petroleum reserves and fuel-tax tools to blunt the immediate macroeconomic and fallout of the oil shock