In the wake of growing pressures on economy, Prime Minister SyedYousaf Raza Gilani has constituted a monitoring committee to address the economic issues. The committee has also been tasked to keep a watch on prices of commodities and to rectify the situation in case of unusual rise in prices. One would welcome constitution of this committee as a step in the right direction. However, one feels alarmed at the official claim that despite a couple of times increases in POL prices during the past few months, the government is still providing a subsidy of one billion rupees per day on petroleum products. Inherent in this claim, one apprehends, is a conscious effort to prepare the public mentally for another increase in the price of POL products.
But if one compares the prevalent international price of oil with the one being charged by oil marketing companies (OMCs) from consumers in Pakistan, then the claim that the government is still paying a subsidy of one billion rupees daily on POL products does not seem tenable. Currently, the international price of oil is around $124 per barrel (159 litres). Therefore, both the government and OMCs, after the latest hike in price of POL products, are making sufficient gains on the landed cost of petrol, which stands around Rs54 per litre.
One fails to understand how the government is still paying a subsidy on POL products when it is charging a good amount as GST on every litre sold in the country? In addition to GST, the government also charges petroleum development levy on HOBC (high octane blending component). Probably, the claim of the authorities is based on calculations by another genius! While fixing the price of CNG, if readers remember, a genius in the Petroleum Ministry had created a lot of confusion, which initially resulted in fixing per litre price of CNG at Rs51, and subsequently the government had to revise it downwards amidst a lot of cacophony with the result that gas stations at some places are still charging rates at their whims.
This reminds one of some businessmen who continue flourishing, but still claim, each year, that they have suffered a loss. When friends confronted one such businessman and asked him to justify his claim about losses despite apparent increase in the volume of business and assets, at first, the businessman tried to parry the question, but when pressed, he replied: “The loss means the shortfall in the anticipated profits.” It appears that either the progeny of those businessmen or their accountants of yester years have sneaked into bureaucracy and are now employing the same gimmickry while calculating government subsidy on POL products.
But the hard reality is that the repeated increase in energy price, during the last 4 - 5 months, has pushed up the cost of production, the cost of transportation and the cost of doing business, which can make Pakistani goods uncompetitive in the international markets and thus affect the exports. Furthermore, this has resulted in a monumental price hike in essential commodities which, in turn, has added to the miseries and hardships of the masses. The woes of the common man are compounded by the unscrupulous elements hoarding essential commodities and resorting to profiteering and black marketing.
The increase or decrease in the price of POL products affects each and every citizen and also the cost of every product. If the authorities remove GST from POL products, it would greatly contribute to stabilizing the prices of essential commodities and transportation cost, thus providing some relief to the masses. But short-term gains and collection of more revenues through measures like GST appears to be the sole concern of some minions of the state. The authorities should ponder over the fact that why the pre-March 2008 administrations were hesitant to increase the price of POL products even when the oil prices in the international markets hovered around $170 per barrel? Obviously, they could visualize the chain effect of the increase, while novices are incapable to do so.
One is not prepared to believe that the authorities would be oblivious of the long-term losses presently inherent in such measures in the shape of galloping inflation, rise in cost of production and thus the prospects of Pakistani products becoming uncompetitive in world markets. Coupled with trade deficit and erosion in currency value, this can lead to further burden on the economy and consequently the citizens.
The increase in prices of POL products has already greatly pushed up the prices of commodities. Believing that the citizens have the ability to bear further shocks, the minister for water and power enjoyed the sadistic pleasure to administer another electric shock to the masses by announcing that electricity tariff would also be hiked soon. This would further increase the cost of inputs and ultimately the price of various products.
.Though profiteering, hoarding, black marketing, adulteration, counterfeiting, sale of expired or spurious or injurious to health goods or charging more than the officially fixed price is a cognizable offence under the Consumer Protection Act and other laws of the land, the authorities in some provinces/regions seem oblivious to their duties to enforce the consumer protection laws strictly. One must, however, give due credit to Punjab Chief Minister Shahbaz Sharif, who has warned that strict action would be taken against DCOs/DPOs of districts from where reports are received of the sale of 20kg flour bag for more than Rs375. He has also ordered that licences of those mills be cancelled which supply flour at more than the officially fixed ex-mill rate of Rs365 per 20kg bag. Let us hope that the CM’s warning produces the desired results and both the bureaucracy and the businessmen do not treat it as a mere rhetoric!
Perhaps, it might be in the knowledge of some readers that before grinding, the millers have to soak wheat in water, otherwise it gets burnt during the grinding process, rendering the flour unfit for human consumption. But due to soaking in water, the grinding process yields flour which is about 20% more in weight than the actual weight of the wheat. However, while marketing flour, some millers do not make any allowance or provision for subsequent weight loss due to evaporation of moisture. Rather, some of them consider it an easy way of multiplying profits, especially while grinding wheat tendered by government agencies.
According to estimates, Pakistan’s wheat crop this year is more than its requirements and the current crisis is a feat of bad management, which is compounded by hoarding/ smuggling. The authorities need to take appropriate steps to address these issues. There is also a dire need to increase per acre yield of crops, which is low compared to that in other agricultural countries, including Pakistan’s South Asian neighbours.
Till recently, groupings/factions have been marring the performance of the country’s premier agricultural research institution. Unless citizens learn to commit themselves to duties/obligations with a national spirit and fervour, our performance shall remain dismal. Further, those who outshine in any field, their services need to be properly recognized. Unfortunately, with change in government, some of the excellent workers in top positions get laid off to be replaced by party workers, often having tainted past. Let merit and merit alone be the criterion for jobs and not loyalty to certain individuals and political groups. One hopes that the minion of the current setup would keep this in mind in their zeal to provide lucrative postings to their sympathizers and camp followers, some of whom are even unfit for those roles.