In one of his last posts on the social networking site Twitter, the late Salmaan Taseer had mused out loud, in his inimitable style, that if the MQM had quit government because of the increase in the prices of petroleum products, then it should follow that they should come back when the prices go down. Well, they just went down, after the Prime Ministers meeting with parliamentary heads of political parties. The Governors remark was tongue-in-cheek; a wry comment on the MQMs excuse for leaving the coalition. Even if, in a parallel universe, the MQM were to rejoin the coalition, the reasons would be entirely different.
Harping on about petroleum products seems to be a favourite stance of many political parties, even those who are not in the business of blackmailing the government, like the ANP, which not only protested against the hike but also took the lead in the initiative for reversing the decision. Though the PPP would not like to admit it, its response would have been the same had it been in the opposition. Due to the absence of an evolved democratic discourse in the country, a consensus on the fact that certain decisions are difficult and they have to be taken, is missing. It would be surprising to see the PML(N) to have taken a different route here. The oil pricing mechanism is what it is. True, it could be changed, but it is always going to be a function of the international price.
The decision to reverse the prices is going to eat into its already limited fiscal space. Moreover, the eventual abolition of subsidies through a phased process, which is a commitment of ours to the IMF, will be affected by this step. Granted, taxation on petroleum products is yet another indirect tax. It is regressive. But the dependence of the federal kitty on these taxes means that they can be removed only if tax collection through other sources improves. That can happen if steps like the imposition of the RGST are taken. The said tax, though it is indirect, will by virtue of design, increase the database for the progressive income tax. Not leaving anything uncovered, parties like the MQM are also against the RGST!
With the economy in as dire a condition as ours, our political parties should lay off the cheap populism. The government and opposition have erred today, something to be realised at the next great jump in petroleum products.
