AS the entire country is adversely affected by repeated hikes in the daily prices of petroleum products, Prime Minister Shehbaz Sharif, on Sunday, announced a limited relief scheme for users of motorcycles, autos and vehicles of up to 800cc to alleviate the burden of rising global oil prices. According to a statement of the PM Office, those having two-wheeled and three-wheeled vehicles will get a relief of Rs100 per litre on a monthly quota of 20 litres, while those owning small vehicles of up to 800cc will get a relief of Rs100 per litre for a monthly quota of 30 litres. The registration of the scheme has been launched and the procedure advertised for convenience of the expected beneficiaries.
There is no doubt that supply disruptions caused by closure of the Strait of Hormuz and a steep rise in the prices of oil in the global market are negatively impacting upon the domestic market, therefore, upward revisions that we have been witnessing during the last two months become understandable. There are also legitimate apprehensions that the control of Bab al-Mandab – connecting the Red Sea to the Gulf of Aden and Indian Ocean – by the Houthis will push the prices further up. As no one knows for sure when this uncertainty comes to an end, logic demands the country should prepare a contingency plan to address the challenge and minimize the impact of the situation on the general public and overall economy. It is also a reality that the oil crisis is affecting the poor and the middle class more than other segments of the society, therefore, Rs. 100 relief on a litre of petrol will mean much for bikers and owners of small vehicles. However, we have been emphasizing in these columns that such strategies offer a limited and cosmetic relief in the face of a sharp rise in inflation, which is affecting the entire populace. There are several questions that the scheme, which is a replica of a similar plan implemented by the Government after the outbreak of the war in the Gulf in May this year, leaves unanswered. The criteria for registration of beneficiaries is not transparent as it is apparently linked to the database of the Benazir Income Support Programme (BISP), which itself remains under criticism for lack of credibility. There are consistent reports that hundreds of thousands of ineligible persons including teachers and other employees of provincial and federal governments are regularly receiving stipends under the scheme that is solely meant for poverty-stricken segments of the society.
As against this, millions of otherwise eligible persons and families remain out of its ambit as their names somehow couldn’t be enlisted in the national roll of BISP beneficiaries. Motorcycles and rickshaws are broadly used for carrying passengers to their destinations and a subsidy of 20 litres a month (or less than one litre in a day) is peanuts for their owners. Same is the case with a 30 litre a month subsidy for small vehicles, whether or not they are used commercially or for personal purposes. This negligible relief would neither meaningfully benefit individuals nor will lead to any worthwhile reduction in fares and transportation charges. A straight answer to the challenge was to do away with the petroleum levy, which has become a bone of contention between the authorities concerned and the general public as its imposition lacks legitimacy and amounts to sheer exploitation of masses by the Government itself that is supposed to protect their rights and interests. Withdrawal of petroleum levy has the potential to counter adverse effects of rising inflation and provide genuine relief to all segments of the society. Similarly, the Government should also review the policy of daily pricing of POL products as the move is only instrumental in filling coffers of oil refineries and owners of petrol pumps.
