Friday September 30, 2022

Crisis after crisis

July 21, 2021

LAHORE: Governments the world over do their best to avoid any crisis to be able to implement their agenda smoothly. This government creates crisis after crisis and then spends its energies on fire fighting.

Crisis after crisis made it impossible for this government to continue comfortably. There would have been no sugar crisis had the government not looked the other way when domestic sugar rates started increasing as soon as sugar exports started on state consent and subsidies.

Two years on, all government efforts and investigations have failed to bring the sugar prices down. Those that were accused of triggering the sugar crisis were softly and selectively targeted, but many sitting in the government were spared. The uncalled sugar crisis created a bad name for those in government, most of whom were not part of the sugar mafia.

Following the sugar crisis, the country was plunged into a wheat shortage. Again the wheat crisis occurred because the state allowed export of wheat in order to earn foreign exchange without bothering about the needs of domestic consumers.

Resultantly, the state had to spend three times more foreign exchange on import of wheat. Wheat crisis was at its peak during the wheat harvest season last year. Hoarders, some of whom are sitting in the government according to the wheat report, took wheat prices to a historic high. No one knows where the ‘bumper’ crop of last and the current year go. Speculations are that most of the wheat crossed our porous borders to the neighbouring countries. The wheat crisis badly tarnished the image of this government.

Two years ago, when global crude oil rates plummeted to almost zero, government reduced petroleum rates by a big margin. In response, oil marketing companies stopped oil supplies and even did not avail the opportunity of importing low cost crude. The government proved that it lacks the writ to act against the oil marketing companies.

Resultantly, petrol shortages hit the country for about a week before supplies were restored. During the investigation it was found that many oil marketing companies did not maintain the mandatory reserves that they are supposed to on a daily basis.

The fines imposed by the regulator did not cover even a day’s profit that these companies earned for over a week. The oil fiasco exposed the incompetence of the state machinery. We are currently passing through a severe gas crisis that has been a regular feature in the last three years. It has now been established that we need regular high imports of gas to meet the demand of not only the industries, but commercial and domestic consumers as well.

Gas has to be imported on a regular basis. We face shortages if a ship is delayed. This time around, the main LNG terminal operated by Engro had to go on yearly maintenance, which practically stopped gas imports. When the crisis occurred, government experts looked for temporary alternatives that could have been in place much earlier.

The gas crisis has shattered the confidence of the industrial sector. Another crisis in the gas sector has grown out of proportion in the shape of circular debt. Imported gas that is more expensive than domestic gas is supplied to the domestic and commercial consumers at prevailing gas tariff. For imported gas, the tariff should be doubled.

The government is providing subsidies on imported gas to the exporting industries. But it gives no subsidy on supplies to domestic and commercial consumers. The result is that gas distribution companies sell gas at a loss. The power companies operating on gas do not pay the gas distribution companies because the federal government does not pay them for the power supplied by them to the national grid.

The gas crisis has exposed the fall out of public appeasing measures (imported gas to domestic consumers at half the cost). Moreover, it has put a question mark on the competence of the team managing gas supplies.

The entire administrative set up has been made redundant because of selective NAB actions against senior bureaucrats. Few reputable bureaucrats remained in NAB lock up for years before being granted bail by superior courts, as NAB failed to prove its allegations or did not submit the challan in the accountability court. Now two senior bureaucrats are in FIA custody in the Rawalpindi Ring Road scam. Numerous high profile political personalities have been spared from the probe.

The mistrust between bureaucracy and the ruling elite has further widened. The investigators should first investigate the allegations against bureaucrats, collect evidence, and present them before courts with full proof so they get punishment after a brief and fair trial.