Living in the Stone Age?

Government should fully accept blame of the petroleum shortage and penalise those responsible for the crisis

The government continued playing the blame game on January 19 over the petrol shortage in Punjab — which had its trickle-down effect in Karachi as well — with the finance minister refusing to take responsibility, while the petroleum minister expressed a rare admission of guilt. The statements came after days of petroleum shortage gripped Punjab with panic trickling down to other cities as well, finally managing to engulf Karachi on January 19. This development strangely happens at a time when global crude oil prices have plunged more than 50 per cent over the past seven months, making it easier and cheaper for any oil-importing country to move towards building strategic reserves, and enabling businesses to target expansion as the cost of production goes down as well.

Instead, what Pakistanis got was an acute shortage of petrol, which could only be explained after taking all the factors into account — the government’s inept policies and traditional short-sightedness taking the top place. In recent times, the prime minister has been happy in announcing reduction in prices of petroleum products, looking to take credit for the relief. But, when it comes to building reserves or enforcing rules to get oil marketing companies to increase their stocks, the government seemed to have done nothing substantial. And now faced with this crisis, the authorities have labelled it a “conspiracy”. But a conspiracy hatched by whom? Even the PTI sit-ins have ended — the government’s go-to excuse for any shortcoming. On the one hand, the finance minister is looking to lure foreign investors in the power sector; and, on the other, there is not enough fuel in major cities to run even small sedans. It is true that demand rose after consumers, already facing CNG shortage, said enough is enough and moved towards petrol as their new fuel. The effect of the price cut also led consumers to buy more. These concepts are taught on the first day of any economics class. However, with oil getting cheaper, the quantity being imported remained conservative so as to avoid inventory losses, with no planning seemingly done to account for the increased demand. Maybe, for a change, the government should fully accept blame of the petroleum shortage and penalise — from the public and private sectors — all stakeholders who caused and/or sat quietly as the public got a taste of living in the Stone Age.

Published in The Express Tribune, January 21^st, 2015.

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