Here’s to hoping we can afford it
Sitting pretty in the aftermath of Mediagate and Familygate, the government seems to have kickstarted its re-election campaign. The ten rupee decrease in the prices of petroleum products is being hailed even by the critics of the government.
Woe be to the odd one out. Someone has to bear the brunt of being a buzz-kill. And someone has to play the devil’s advocate when the times are tough. This newspaper urged, in the past, for the government to eke out a clearer methodology for pricing these products but nursed a sympathy for governments, the world over, that are forced to increase prices. Going by that logic, though we applaud any and all relief to the people, a question has to be raised whether the step is a fiscally responsible one.
There are many who attribute this to the lowering prices of oil products (not the secular trend but a momentary one) in the international markets. True, but when the same decreases were used to advocate a decrease in the national prices of petroleum products, the government could argue that the petrol pump rates are, at best, a lagged function of the international price of crude oil. Where’s that logic here?
The prices of all products are a function of petrol rates, true. But primarily when the latter goes up. Things aren’t so deterministic when the rates go down. Is the total relief really worth the fiscal space?
The government has been courting resentment on the electricity front as well. That is because it is continually increasing tariffs. The fact of the matter is that they aren’t nearly high enough. Pakistan has an installed capacity to produce more than the electricity it requires. Just not enough to produce it cheaply. If the authorities decide, in a bit of reckless populism, to reduce these, the loadshedding will increase.
The government doesn’t seem to have its act together on the power front. Not to imply its performance in stellar on other fronts either. But nowhere is the impression of an auto-pilot approach more apparent than on the power front.
It’s broke. Fix it. Don’t try to be more popular.