The government’s decision to freeze the fuel levy without bringing the IMF on board could cause trouble in the future. The outgoing Finance Minister Miftah Ismail has rightly spoken out against the decision of his party. At a time when the government has spent the past six months trying to make substantial corrections to the government’s revenue stream, freezing the fuel levy and cut down on collections goes against that policy.

A lot of the adjustments to our economic policies have naturally come as a result of the IMF’s recommendations, which are attached to the bailout programme. The fuel levy was also a key stumbling block before the government imposed a partial tax on all fuel product; this was one of the steps which led to the tranche of the bailout being released. Admittedly, the IMF has relaxed some conditions for Pakistan due to the recent floods, but this does not mean that we have gotten a blank cheque with which we can now make our own decisions without consultations. Turning back now without taking the international lender into confidence could jeapordise the entire programme.

It is important to understand that once a government starts heading down a policy path, taking a decision that goes against this is only a step backward, and rolls back the progress made in the past. In this case it is no different. This was certainly a worry when the government changed its top finance man—with Ishaq Dar coming in, a change in tack for the government with more populist relief was expected, and this is exactly what is happening.

At the moment, the government is looking at silver linings. The Rupee’s value against the dollar has increased while the IMF has allowed from some relaxations, but this does not mean it is open season for the government to give the public relief and gear up for its next election campaign. The cost of that will be borne by the economy if the government heads down this path. The fuel levy is unpopular, but at this point it is necessary. The government might have to reimpose the tax very soon down the line.