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February 17, 2019

Who’s to blame?


February 17, 2019

Amidst an ongoing inquiry into inflated gas bills in the country, Petroleum Minister Ghulam Sarwar has opened up to the media about the matter. While he has offered no real answers to the question of what the inquiry into the matter or the investigation is coming up with, Khan has however admitted that the government had raised the gas price due to IMF pressure. In all this, whether the government is scapegoating the IMF or not is a question that does need to be asked. One should recall that when the PTI government decided to raise gas prices, no mention of the IMF was made at the time. Instead, we were told that the decision was being taken indigenously, because there was a mounting circular debt crisis in the gas sector. Now the minister has also announced that the government may be reviewing the existing slabs to attempt to address the issue. (The gigantic increase in gas bills had recently led to outrage against the government). One must wonder that if what the minister is saying is true regarding the decision to increase gas prices, how will the government now manage to convince the IMF to reduce gas prices? One must also wonder what the role of the petroleum ministry itself is if decisions are being taken somewhere else.

It is the Pakistan government that is responsible for economic policymaking. The creation of an entire bureaucracy to determine gas prices in Pakistan should mean that no one from the outside can determine how gas prices will move. Why then is the petroleum minister putting the blame on the IMF? The fact is that the IMF has not been elected to make economic policies in Pakistan. The task lies with the sitting government. In the face of pressure for unpopular decisions, the right response is not to say that it was someone else. That just raises more questions about the logic of the decision itself. Finance Minister Asad Umar had confidently defended the decision to raise gas prices back in October last year.

We must also remember that the gas sector has been consistently neglected. Project after project has been started, agreements have been inked, pipelines inaugurated, but none of them remain functional. In the face of gas shortages and a rising circular debt in the energy sector, what we need is not merely a revision of gas slabs, but a fair assessment of whether there were severe errors of judgment involved in the original gas price hike in the first place – with or without the IMF’s involvement in the matter.

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