Oil and electricity are going to be the main nemesis for this year as well.
KARACHI: It is budget season in Pakistan again. Even under normal circumstances it implies inflation, additional taxes and generally overall increased misery for people.
Oil and electricity are going to be the main nemesis for this year as well. While oil will give a respite for May and June, its fundamentals have changed forever, after the inclusion of China and India in the list of flourishing countries. Estimated most conservatively, it still means oil and energy for another 250 million people. The floor price of oil seems to be around $75-$80, with no upper limit. Therefore, all countries dependent on imported oil are bound for a rough ride. Fortunately, Pakistan and India have a magnificent alternative; sugarcane production. If and when Pakistani bureaucrats opt to act patriotically, they will realise the- cheaper and environment friendly potential of extracting ethanol from sugarcane and the benefits that this can reap. Pakistan State Oil and the government of Pakistan already have a splendid carrier for fuel, which is presently planned to be marketed as E-10(ethanol 10) in some big cities in the next 10 years.
The fundamental advantage of adopting these measures would be the elimination of Pakistan’s perennial disease of trade deficit.
Shahid Ehsan Sheikh
Published in The Express Tribune, May 9th, 2011.
