Every now and then we hear that the Oil and Gas Regulatory Authority (Ogra) forwarded a summary for an increase in petroleum prices only to be rejected by the ‘pro-public’ prime minister. Monday was just another day when the government announced retaining subsidies on petroleum products in the current fortnight, however, there are indications the indecision is creating problems for the government to resume talks with the International Monetary Fund (IMF) which are to be held in Doha today (May 18). The coalition government, led by Prime Minister Shehbaz Sharif, may not withhold the decision for a long-only by blaming the previous government for “planting land mines” for them by announcing a subsidy on power and petroleum rates.
Federal Finance Minister Miftah Ismail cites an agreement of the Pakistani government with the IMF that “no subsidy” would be given on petroleum or any other product while the petroleum levy would be fixed at Rs30 per litre besides 17% General Sales Tax (GST). If the levies promised to the IMF are counted, the price of petrol should cross Rs200 per litre. The international market is already on fire, which means there is hardly a chance that petroleum prices will come down. If the IMF terms are implemented, which are to be implemented somehow, inflation will cross the threshold of 30 percent. Finance Minister Miftah Ismail is trying to find a balanced approach in the negotiations with the IFM to get released the stalled cheques. He says the government of Prime Minister Shehbaz Sharif does not want to burden the government with the price increase, and the proposal to increase in prices of petroleum products but the said rates could be adjusted later.
The prime minister met all key coalition party leaders. Though no detail was shared by the government about the outcome of the meetings, the PML-N, being a leading coalition party, should lead the discussion on tough decisions as the impact of the huge amount of subsidies on petroleum products on the economy as a whole cannot be ruled out as per the estimates of the self-governing circles so there is a need not to let time go by. The government must also keep in mind the expectations of the people that the new government will get them out of the maelstrom of difficulties. The situation is such that it does not take much time to make decisions on subsidies and settle matters with the IMF. Only by making the right decisions in a timely manner and by taking the people into confidence about the need and importance of these decisions, progress towards quick results can be the only way to save the political atmosphere of chaos. The challenges facing the country demand that all quarters, including the government and the opposition, come up with some form of coordination and not delay in formulating a formula by which the situation can be prevented from escalating further. This kind of effort is also necessary to resolve the differences between the various parties in the government regarding the holding of general elections sooner or later after the expiry of the current constitutional term.