Having successfully created and mishandled the whole petroleum situation for almost the entire month, someone in Islamabad was getting bored. They must have thought that everyone has been all praise for the central bank, which has thrown one surprise after another, out of turn, on account of monetary policy, so it must be good to surprise.
So there came the petroleum price notification. Effective from 27th of a month- a complete four days before the price change was due. So, the relevant ministries are clear winners on the surprise front. But what does a price change, that too, not a tiny one to tweak a little number here or there, late at night, four days from the month end achieve? Flak for the masses is one. And maybe the petroleum products themselves.
Jokes (not the decision) aside, the manner in which it has been done is bound to raise more questions. Forget for a moment, if you are from the “I-told-you-not-to-decrease-prices” camp or the more usual “petrol-bomb” camp – the step vindicates both camps, and not necessarily for the reasons they are in the respective camps.
What happened leading to the petroleum price decision of June 1, 2020 and the subsequent petroleum shortage, has been covered in good detail, and has various versions to the story. Take your pick from government’s miscalculation to Ogra’s robotic response, and from the refineries’ age-old blackmailing to OMCs’ hoarding. The real context is not what had happened. It is the timing of the move, that will rightly lead to more ruckus.
And then there is the small matter of the Petroleum Minister, telling in an almost chest-thumping tweet how the government braved Ogra’s recommendation of a higher increase of Rs31.58/ltr and instead showered the masses with a benefit of Rs6/ltr. Only that it did not. There is no way that Ogra could have recommended a higher increase, as the PL remains at the maximum allowable limit of Rs30/ltr and GST at 17 percent.
Drawing comparisons with the rest of the world is the next thing the minsters do, and then they bring up the dollar price. Well, it may be fine once in a while, but the people are paying the price in rupees, and it would not matter much how much a French commuter is doling out in dollar terms to fill his gas tank.
Two things will do nicely. Transparency in pricing is one. You can’t change it out of turn without rhyme or reason, as this will rightly lead to suspicion of favoritism.
Second. It has been a very very long time since there has been a need to explain the price mechanism to the masses. Fancy English newspaper columns and research journals are good, but they wouldn’t do that job. No matter how basic and schoolboy stuff it sounds, explain the case to the people over and over again and bust myths. Do it on every medium possible.
Also. Will any heads roll?
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