Unaffordable Electricity and High Fuel Prices Cannot Exist Together in Pakistan

If the federal administration wants to keep petroleum taxes high, it should provide ordinary Pakistanis relief somewhere else.

Key points

• Can Someone Explain Why Govt Buys Expensive Sugar to Sell It Cheaper?
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• Every time petrol, diesel, electricity or another basic necessity becomes more expensive, the public is informed that there is no choice as of the IMF program.
• If IMF is really responsible for austerity in Pakistan, why won't it question our heads of state spending time overseas?

Fuel rates nearing Rs. 400 per litre are becoming the new normal. Some blame the war, others Platts.

In practice, the administration can argue that international oil costs are beyond its control. Fair enough. But it has complete control over how much it spends. This is where the argument regarding the International Monetary Fund (IMF) starts losing its power. Does Public Resent Creating More Provinces?

Every time petrol, diesel, electricity or another basic necessity becomes more expensive, the public is informed that there is no choice as of the IMF program. But there is always a choice regarding administration spending.

Why should a family struggling with a massive electricity bill be projected to sacrifice while the administration continues to carry expensive official travel, allowances, protocol, official vehicles, aircraft and other discretionary costs?

Nobody is asking the administration to stop office-holders from travelling when the trip is genuinely necessary. The question is much simpler.

Does every trip, allowance and administration expense deserve the same protection as food, electricity and fuel in a country where millions are already cutting household spending? An electricity bill demonstrates how swiftly costs can pile up.

Consumers do not pay only the headline electricity tariff. Depending on the connection and consumption, bills can include fuel adjustments, quarterly adjustments, financing charges, electricity duty, General Sales Tax (GST), income tax and fixed charges. How to Find Relief.

For households using sizeable amounts of electricity or facing high fixed charges, the effective cost per unit can become extremely high. This is precisely where the administration has room to provide relief.

If petroleum levy revenue is considered necessary to keep the fiscal accounts on track, reduce the tax burden somewhere else.

Cut electricity taxes. Remove unnecessary charges. Offer relief to households and businesses that are already paying heavily for energy. Reduce taxes on registered solar connections.

But relief should not be financed by simply creating another hole in the budget. Administration Should First Look At Itself.

Foreign travel should face stricter scrutiny. Official aircraft and helicopters should be applied only when justified. Allowances and protocol expenses should be reviewed. Maybe authorities going abroad should be taxed.

Meanwhile, the point is that every discretionary expense should be tested against one simple question.

Would the administration still approve this expense if the capital had to come directly from a struggling taxpayer's pocket? Pakistan's difficulty is not only that the administration needs more revenue.

It is additionally that residents have halted believing that the administration spends their funds carefully. That is the real credibility difficulty.

Although grudgingly, the public can still understand expensive oil. It can understand an IMF program. It can even understand tough taxes. From what this analyst has read so far, what individuals will not easily accept is being informed to pay more while the administration appears unwilling to cut its own luxuries.

If the administration wants Pakistanis to share the burden of the economic crisis, it should show that it is sharing it too.

Keep the petroleum levy if you must. But then cut the electricity burden and cut administration expenses too. That would be a far more convincing economic message than blaming the IMF every time another bill goes up.

Austerity commands respect only when it cuts both ways. Individuals will accept sacrifice when those in power are seen making sacrifices too. The views expressed here do not represent ProPakistani and its owners. Stay Connected with ProPakistani.

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Taken together, the developments around unaffordable Electricity and High Fuel Prices Cannot Exist Together in Pakistan point to a situation that is still moving, and the coming days should bring more clarity.