Misplaced optimism

Caretaker Minister Gohar Ehaz sees fuel prices coming down, but for how long?

Caretaker Commerce and IIndustries Minister Gohar Ejaz  has expressed the view that the consumer could ‘expect good news on October 1’ with respect to fuel prices, because the price of fuel had been driven up by the declining rupee. His expectation of a fall in fuel prices at the next ‘fix’ is clearly based on the recent rise in the rupee. However, this does not take account of the fact that there are two factors which will drag down the rupee, and thus send fuel prices soaring. The first is that the recent decline was achieved by purely administrative measures, and the basic disequilibrium in the economy still continues, and thus the economic reasons for the decline of the rupee persist, meaning that the the rupee will go down, and with it the price of fuel will increase, assuming that the international price of oil,  does not increase. That is also a flawed assumption, as the price, currently at $ 93-plus per barrel, is predicted to reach $150 per barrel in coming months.

The caretakers are also committed to staying on the IMF programme, which means that no subsidies are to be offered to help relieve the public suffering; indeed, that any subsidies still given are to be ruthlessly traced and eliminated. It is thus ominous that members of the caretaker government should be freely identifying problems that require long-term solutions. And then offering to tackle them. It should be recognized that the solution to Pakistan’s energy problem lies in resolving some of the problems caused by elite capture, which cannot be done by caretakers, but which requires an elected government with the support of the people.

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That impliiies that the government should stop pretending it is here forever, especially now that the Election Commission has indicated that elections will be held some time in January, which is beyond the 90-day limit given by the Constitution, but is short of the year or more than some were speaking of. The caretakers should not think in terms which might lead to them overstaying their mandate, which is limited to the holding of free and fair elections.

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The Editorial Department of Pakistan Today can be contacted at: [email protected].


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