The present government has decided not to withdraw fuel subsidies for fear of political backlash. Among the beneficiaries of these subsidies are four million car owners who are from the richest class of our society and should be taxed heavily. An increase in diesel prices will affect all road transport and result in the diversion of carriage of goods from roads to the railways. However, the government should ensure that freight rates are not increased unnecessarily and capacity remains available to carry the diverted traffic. This will result in reduced fuel consumption, a decrease in the overall cost of transport, reduced congestion on roads, and a significant decline in the current account deficit. An increase in the cost of diesel will correct the wrong policy of promoting carriage of goods by road.
Double-deck London-style buses should be reintroduced in Pakistan. This will help provide affordable transportation options to people. These steps can help the country deal with the problems created by the removal of the fuel subsidy.
Abdul Majeed
Islamabad
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