Saturday July 13, 2024

Some courage shown

By Mansoor Ahmad
June 17, 2022

LAHORE: Finally, the government mustered the courage to announce another hefty increase in petroleum rates that have eliminated all the subsidies the state was bearing on these products. It was a necessity and there is no need to be apologetic about it.

In fact, the previous regime should not be blamed on this count either because with or without the IMF agreement, we had to increase petroleum rates in line with global prices. The present government when in opposition used to severely criticise the PTI government for every increase in petroleum rates when crude oil prices increased globally.

Now, the PTI in opposition is paying back the same coin. The masses have been tuned by every opposition party in Pakistan that any increase in petroleum rates is unjust.

Even the educated youth, always tuned to the internet, do not bother to see the prevailing rates of gasoline in other countries, particularly our neighbours. The nation must be made to understand the rates of all imported items depending on their global rates at that time.

Public does grumble when rates of edible oil increase but accept it with no protest. It is because edible oil production and marketing is in the hands of the private sector. They charge rates that are economically feasible for them.

They are operating in stiff competition but in view of higher global rates they must increase the prices or go out of business. The same is the case with crude oil.

If the state continued providing subsidies from borrowed money it would go bankrupt. Such bold and realistic decisions are needed irrespective of losing favour with the electorate.

Let us admit the fact that Pakistan is a poor country. Its economy is elitist. In an elitist economy, the rich get the lion's share from growth and the poor get the lion’s share when the growth is down.

Time has come when we must think of ways to promote equitable growth. There are acute governance problems. When governance is weak it tends to favour the rich or the influential segments of society.

Rich have yet not been taxed according to their capacity to pay. In weak governance, rules are violated to the advantage of richer and influential segments of society. Influence comes with wealth.

The power and gas tariffs would also go up from July this year. The increase is so high that it will test the patience of the consumers.

Again, the problem is that the cost of power and gas has increased. Power produced from fossil fuel has become very expensive. The rates of gas and oil are at a historic high. Coal prices have soared to unprecedented levels. The government has no option but to increase the tariffs.

Tariff increases can be reduced if the government pays attention to eliminating corruption and wastages in gas and power transmission systems.

This government is so busy in fire fighting that it has neglected governance issues in the power and gas system. It should give attention to these problems now.

There would be no need for further increase in power rates if power theft is gradually controlled. At the same time, it must be ensured that pending power dues from both public and private sectors are fully recovered.

Dues against provinces must be deducted monthly from their share in the federal divisible pool. The assets of private sector defaulters must be attached. Two decades back, there was no gas theft. It can still be controlled immediately with the help of technology.