After an unprecedented increase in oil prices, the provincial governments of Sindh and KP have reduced the fuel quotas enjoyed by the members of their respective cabinets, along with legislators and other government officials by more than one third (40% and 35%). The federal government is also deliberating on following in their footsteps. This decision is in line with the austerity measure taken by Prime Minister Shehbaz Sharif who slashed petrol and diesel subsidies by a whopping Rs60 in roughly one week. Subsequently, the decision of slashing the petrol quotas enjoyed by government officials in Sindh and KP was like biting the bullet, which is why as per a member of the federal cabinet, the PM is considering reducing the fuel quota in the federal government too.
It is a need of the hour, as the government has termed it in its official correspondence. A step which was necessary for the resumption of the IMF’s $6 billion programme stalled in April this year. As Pakistan is engulfed in further economic turmoil, the people are left to suffer. In line with this IMF programme prerequisites, galloping inflation of necessities is expected in the near future.
A few days ago, a close aide of the PM candidly remarked that the elites were in no way morally justified in enjoying petrol and diesel subsidies when the state was suffering at the hands of a debilitated economy. In line of economic moralities, the remark was obviously well warranted but the state should have come up with a more socially just mechanism that was at least less regressive in nature as a petrol price of Rs209.86 per litre severely affects the 21.9% of the population that lives in extreme poverty, the churning poor like farmers and seasonal workers, and the transient poor who live close to the poverty threshold.
Slabs of fuel prices could have been used to make the situation less grave and more socially just for the welfare of the poor sections of society. Having said that, cutting down on government spending by reducing the perks enjoyed by the officials is one way to help save the ailing economy, while cutting down on unwanted foreign trips of state officials and cabinet members is another.
The bureaucracy is resistant to change and as a result, it would not take this quota-cut with open arms especially when they are of the view that hyper-inflation in the COVID-19 and post-COVID time period was not met with a proportionate increase in their salaries, leading to a considerable decrease in their real incomes. Thus, as a recent PIDE (Pakistan Institute of Development Studies) study concludes in its comparison of the remunerations of different sectors of the economy compared with the GNP per capita, the civil service stands at the lowest rung, where young bureaucrats suffered the most due to a lack of salary increments. Where a quota-cut of authorized petrol usage would further decrease the fringe benefits enjoyed by the government officials (the state has been tightening its belts due to the austerity drive that was initiated by former Prime Minister Imran Khan), it is important to say that this is a need of the hour and every small step counts.