EDITORIAL: Why is the petrol ‘crisis’, or the perception of one at least, being allowed to grow? When the petroleum ministry is claiming “sufficient fuel supplies” while there is visible shortage at pumps in major cities of the Punjab, and Ogra (Oil and Gas Regulatory Authority) has identified 19 possible hoarding dumps in a letter to the Punjab chief secretary, when will we see decisive, example-setting action from the government? Minister of State for Petroleum Musadiq Malik duly held traditional hoarding by interest groups responsible for the shortfall and warned of “strict consequences”, but it would have been better if the government had moved to “cancel your licenses” instead of just threatening it.
This isn’t the first time the “few people” he pointed at have sabotaged fuel supply to make quick, fat profits, so what’s the use of going through the same drill of issuing warnings and threats all over again? Besides, this time the economic situation is so precarious that even artificial shortages can disrupt the production cycle and spook financial markets, triggering a flight of capital and loss of confidence that can knock the entire economy over the edge. So, time is of the essence and the government should be held squarely responsible for any further delay in restoring normalcy.
These hoarders have got too used to taking advantage of international oil price swings both ways, up and down, precisely because they have never been made to pay for it.
When Brent shoots up, they shut down their pumps – illegally – to sell the same stock for more after a few days. And when it drops, they hide stocks bought at higher prices to pass the difference to consumers – again illegally – instead of absorbing it themselves.
This circus is not just limited to oil, of course, and goes on in all sectors with the government always watching from the side as market manipulators grow rich and then exercise even greater influence on the official machinery.
Each time it is ordinary consumers of commodities that end up being exploited. Now, with growth dropping, inflation galloping, unemployment rising and the economy possibly tumbling into default, they must be protected from any more unnecessary suffering.
It’s already very unfair that they must pay extra for oil just because successive administrations ran the country so deep into debt that it can no longer survive without IMF (International Monetary Fund) bailouts and its harsh “upfront conditions”.
And on top of the recent Rs35 per litre jump in petrol price, they are already worried by rumours that there might be more, and possibly higher, such increases just because the Fund says so.
To squeeze them any further because the usual hoarders and manipulators must also have their share at this fragile time might just push them into the kind of aggressive reaction that can paralyse the entire country.
Musadiq Malik’s press conference should, ideally, have come after normal supplies were restored. People are not assured, nor impressed, when they hear about things they already know and understand very well.
The government must also understand that it needs to sort this mess out not just for the people, but also for its own, badly battered, reputation; especially since it will come under the spotlight again very soon when it is forced to raise prices periodically to meet IMF’s requirements.
This is a very serious crisis but solving it is not too difficult. The petroleum ministry has already identified its reasons and those responsible for them. All that is left is for relevant authorities to spring into action. And they should know that dragging their feet any further will make them effectively complicit in this crime.
Copyright Business Recorder, 2023