Living from day to day

The country manages to stagger along, but only just

The closure of the Hormuz Strait, through which almost all of the country’s oil passes, has hit hard. The global oil price has reached $118 per barrel, and the country is staring down the barrel. The good news is that the country is still avoiding further measures beyond those that have already been taken. The bad news is that they are still under consideration. One of the signs that things are getting worse is that the provinces have agreed to share some of the burden of the subsidy on petrol meant to hold prices down despite their increase, If the provinces had agreed when the proposal was made, it would simply have been the provinces alleviating the federal burden, but now it means that things are getting worse. One of the issues is the targeting of the subsidy, so that motorcyclists rather than car-owners benefit. The government will have to ensure that diesel continues to be subsidized, because on it depend the cost of transporting both goods and people, as well as the upcoming wheat harvest and Kharif sowing.

One task the government seems to have in hand is the supply of both diesel and petrol, and while there can be no certainty as long as the Hormuz Strait is closed, stocks are sufficient to avoid a shortage. However, the inability of Qatar to supply liquefied natural gas means that gas loadshedding has started, even though it is not extensive in urban areas. Electricity loadshedding has not increased, being an option rejected by the government after it was proposed. However, it should be noted that operating oil-fired and LNG-fired generation plants may not remain feasible for that long, and the option will then be brought back on the table. So will that of a ‘smart lockdown’, which means that weekend movement of traffic will not be allowed.

It is in the context of the all-round disruption of ordinary life that has resulted from the US-Israel-Iran war that the meeting of Deputy Prime Minister and Foreign Minister Ishaq Dar with Chinese Foreign Minister Wang Yi in Beijing on Tuesday is so important. Mr Dar and Mr Wang have prepared a five-point proposal which is in effect a second proposal, alternative to the 14 points given by Mr Trump, and stressing the security of the Strait. The decision of accepting it as the guarantee Iran wants of safety from attack rests on it, but it is a solid beginning.