Petrol subsidy plan

While programme is ambitious, noble; it remains to be seen what modality will be used to implement it

The aftereffects of the spiralling oil prices, exacerbated by the slide in the rupee value, has landed the government on a bed of prickly problems — runaway inflation impacting its base. Thankfully, the digital-savvy government has proposed an ambitious solution to the problem — that of subsidising those at the bottom of the vehicular chain. The government plans to offer fuel at subsidised rates to rickshaw drivers, motorbike riders and even buses. The idea is that it will lower some of the burdens on the vast majority of the population using these modes of transportation.

While the programme is ambitious and its intentions noble, it remains to be seen what modality will be used to implement it. The strategy of selective fuel provision at pumps to motorists who wore helmets was simple but implemented imperfectly. This, though, is not quite the same. There are murmurs of devising a digital solution to ensure the right people benefit. But we have seen too much technology fail to trust in it yet. Moreover, given the sheer number of these vehicles — more motorcycles are sold in Pakistan than any other vehicle type — the subsidy bill could prove to be yet another issue for the cash-strapped government. Not to mention that hedging the entire process on a cost-sharing basis between the federation and provinces will drive the centre-province wedge deeper.

Lastly, such a subsidy would have little impact on inflation in the country and would divide a frustrated and anxious polity further. After three years at the helm, the government still needs to learn about the compound impact that rising fuel prices and a spiralling rupee has — a subject it apparently had a strong grasp on while out of office. The government must sit down with all relevant stakeholders and seek a comprehensive solution to inflation, not put on more band-aids.

Published in The Express Tribune, October 24^th, 2021.

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