WITH Ramzan approaching and apprehensions being expressed by people that the artificial price-hike might scale new heights, the Federal Cabinet, which met in Islamabad with Prime Minister Imran Khan in the chair, took appreciable decisions with regard to gas and electricity tariff and ensuring availability of items of daily use at affordable rates. The meeting also reiterated resolve to go deeper into wheat and sugar crises and penalize all those involved in creation of their shortage and the resultant undue increase in their prices.
No doubt, the Prime Minister has been taking keen interest to check the phenomenon of price-hike as creating immense difficulties for masses with understandable implications for popularity of an elected Government. However, there was a general impression that the real issues were being avoided and efforts to tackle the menace of inflation were confined to window-dressing. The situation became all the more worrisome when the Economic Coordination Committee of the Cabinet (ECC), in its latest meeting, instead of coming out with concrete decisions and measures to address the challenge, preferred to indulge in blame game by shifting the responsibility of the price-hike on the provinces, forgetting that in at least two provinces, PTI has its own governments. Otherwise too, the attempt to pass on the buck to the provinces conveyed a dismal message to the people that the Federal Government was helpless and has no ideas as to how to provide relief to the people. In this backdrop, the directions of the Prime Minister for a freeze on the gas and electricity tariffs and finding best possible options to reduce the burden of various surcharges in gas and electricity bills are welcoming. This is because any increase in the tariff of gas and electricity triggers a vicious cycle of price-hike as prices of almost all products and services are enhanced with serious impact on the common man.
The decision of the Prime Minister assumes significance in the backdrop of reports that the gas companies were demanding hefty increase in tariff and the IMF also wanted further hike in the tariff of electricity, which is already highest in the region and has crippling effect on competitiveness of the country’s exports. However, the situation is so precarious that mere freeze would not produce the desired results and that too when the decision is applicable till June this year, meaning thereby that the freeze would remain just for four months with possibility of upward revision during next financial years. There is, in fact, need for reduction in tariff, which is also due because of new pattern of the national energy mix. It is also true that the hands of the Government are tied because of rising burden of circular debt but its causes are other than the difference between the real cost of generation and the price charge from consumer. The ongoing programme for replacement of inefficient and theft-prone transmission and distribution lines as well as use of more efficient transformers and grid equipment has the potential to address the problem in an effective manner. The overall payable bill would also come down significantly if directions of the Prime Minister for reduction of various surcharges and fees are ultimately implemented as presently cost of electricity is less in the bill than the multitude of taxes that a consumer has to pay on different accounts.
Relief can also be provided to the people if the dastardly practice of inflated bills is checked effectively as so far measures taken in this regard have proved to be cosmetic and meter reader and billing staff still misuse their authority in this regard apparently for palm-greasing. The slab system for electricity and gas bills is unjust and exploitative in nature and the possibility of introduction of universal rates for entire consumption may be explored. As for wheat, sugar and ghee prices, these are not coming down despite claims of the authorities concerned in this regard. We have been emphasizing in these columns that the strategy of provision of subsidized items through Utility Stores Corporation (USC) is not the solution to the problem because of limited outreach of the USC and the fact that mostly substandard stuff is provided to the masses in the name of subsidized sales. One can understand the concern of the Prime Minister when he directs the USC to procure ghee from the ghee mills of the merged tribal districts and Azad Kashmir, where there was no levy of taxes and duties so that the relief in prices could reach the people but one fails to understand why millers are not being made to pass on the benefit of falling prices of edible oil in the international market. Similarly, the completion of the much-trumpeted probe into artificial shortage of wheat and sugar and uncalled for increase in their prices is also overdue.
