There is no justification for subsidizing petroleum products in Pakistan. The former finance minister should explain why he took the decision to sell petrol and diesel at discounted rates. If the decision was meant to provide relief to the people, one thinks it was a counterproductive move. Selling an imported item of necessity below its cost increases its demand. This is what happened in Pakistan. An increased demand of petrol and diesel resulted in more imports of fossil fuel in the country, which needed more dollars to finance the import bill. Such subsidies also mean that we are wasting our foreign exchange reserves which are usually financed by the IMF and other friendly countries.
Our policymakers should stop providing any kind of subsidies on petrol and diesel and sell them at their true prices to avoid destructive economic consequences.
Ejaz Ahmad Magoon (FCA)
Doha, Qatar
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