Load management is clearly not a uni-dimensional process. It is not manifested in the decision to cut the power off the grid for a particular quantum of time. It is, instead, spread out into a matrix where different decisions have to be made. Electricity load-shedding, to give one example, is worse for the rural peripheries than it is for the urban areas; within the urban areas, different decisions have to be made for residential, commercial and industrial areas, each a newer dimension to the management.
The situation for natural gas is similar. The federal ministry for petroleum and natural resources is set to ensure that the load management of natural gas is evenly distributed. To this effect, it is going to decide upon an equitable distribution of the stuff between the IPPs, the industrial sector and the fertilizer producers by cutting down on their allocated quotas. All of this, of course, is going to be in addition to a massive gas price hike.
Now, as it inevitable in such situations, the affected quarters are none too pleased. The industries will not warm up to the idea, as won’t the already embattled fertilizer sector. The common man, that mute concept everyone is so fond of speaking for, isn’t going to be charitable either. Ditto, for the CNG pump owners and their clientele.
But priorities have to be aligned and decisions have to be made. The CNG pumps, counterintuitively, cater to a better heeled demographic than the petrol and diesel pumps, which service motorcycles, scooters and public transport vehicles; perhaps the CNG pumps can afford a slight hit. CNG prices are set to go to 65 percent of petrol as opposed to the current 45 percent.
The fertilizer sector is on the decline, with urea and DAP sales falling consistently. They might not be able to sustain a price hike like the one being envisioned.
Public policy is far more complex than making sure resources, taxes and problems are evenly distributed. That would have been a near mechanical process. It is actually a calculated set of risks, incentives and payoffs, all calibrated to achieve what is a utilitarian best for society and the economy.