Petrol subsidy?

It is uncertain if and how the decision to slash prices of petrol products by Rs100 for the poor will be implemented

Relief is a buzzword these days. It is most sought-after, but unattainable. And, when it is sounded by the government, it is taken with a pinch of salt. The decision on the part of the beleaguered coalition dispensation to slash the prices of petroleum products by Rs100 for the poor, especially those driving motorcycles, rickshaws and cars below 800cc has raised many eyebrows. This was announced in the backdrop of another spectacular raise in petroleum products by Rs13 per litre. There are very few believers and, moreover, not many are sure how it will be implemented, if at all. This fixation of imagination is not unfounded, as there are hardly any statistics or an evolving mechanism at hand to see through this relief, and a run on the petrol stations seems to be the only plausible outcome. Similar vows earlier too had ended up in thin air as wishes are not horses, per se.

The convention and the desire to come up with subsidies and relief to the neglected and low income segments of the society is appreciated. But that has been a microeconomic problem in itself on the path of realizing it. International lenders question its veracity, and authorities sooner than later fumble over its prompt execution. The Utility Stores and special subsidy markets for perishable products, set up for this purpose, have not been a great success. The reason is that there is no quantified data to estimate the needful requirement, and at the same time hoarders and vested interests come into play to steal a lion’s share. In the case of petrol, its modus operandi to execute is out of imagination, and literally impossible. Then there is a fear of lawlessness as soaring breakneck inflation has literally pushed the masses to intolerant edges. The gap between the haves and have nots is shrinking, and creating dire consequences.

What is needed is a break from supra-inflation. A logical cut down on taxes, levies and surcharges on petroleum products will surely have a snowball impact on all commodities as a price slash will automatically set in.

Published in The Express Tribune, March 21^st, 2023.

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