Fuel prices cut

Oil prices will begin to go back to normal

The weekly fixing of the petrol price has already begun to reflect the reopening of the Strait of Hormuz, though the Sindh government’s notification of the closure of all markets and malls by 9 pm might seem to be coming too late. The big cut came in the diesel price, reflecting the fact that the petroleum levy on it had been restored. Petrol had had its levy already removed, so the reduction was only Rs 11.83. Still, that means that the subsidy for its price is not going to have to be forked over by the government any more. So much thus depends on whether the US-Iran talks succeed or not. The world is watching at the moment, whether or not it will have to deal with another closure of the Hormuz Strait; therefore much depends on what transpires in Islamabad between the USA and Iran.

Even if the present fall in prices is not permanent, it will still leave behind the question  of what to do about austerity measures. First come the austerity measures for the public, like closing markets early. That is a salutary measure, and should not be relaxed when fuel availability goes back to normal. Educational institutions will probably have to go back to normal. Then there were government measures, such as reducing the amounts of fuel available for official vehicles,

Or cutting salaries, should not be retained fully, but there must be some belt-tightening. As a matter of fact, many citizens are wondering why it wasn’t done before. It should be understood that austerity measures are not a magic bullet that will compensate for the Strait closure, or pull the country out of the debt trap, but every little bit helps.

The lack of certainty is another incentive towards distinguishing essential from non-essential expenditure. It is too early to assume the emergency is over. Indeed, all it has shown us is that the emergency is ongoing, and the need to conserve resources was always there, and there should be no extravagance even when it becomes clear that the Strait has been reopened. Pakistan is one of several countries which has very many lessons, big and small, to learn from the US-Israel attack on Iran. It must make sure that it learns the right lessons, and that it acts on them.