EDITORIAL: POL price hike - Sunday, April 03, 2011

As if it was a game of hide and seek, the government has made it a habit of withdrawing or partially withdrawing hikes in prices of petroleum oil and lubricants (POL) after first announcing an increase. The government withdrew the price hike announced in December as part of the reconciliation plan with PML-N, which involved the implementation of Mian Nawaz Sharif’s10-point agenda. Then again, last month, it introduced a hefty increase to align the domestic prices with international prices, but made a partial withdrawal in the aftermath of protests by coalition as well as opposition parties. Much to the dismay of ordinary citizens, in its monthly review of March, the Oil and Gas Regulatory Authority (OGRA) has again raised the prices of petroleum products by 10 percent on Thursday. While the industrial and traders’ community as well as the general public have genuine reasons to reject this hike, political parties have found a popular cause to agitate against the government.

Facing the Treasury and Opposition senators’ criticism and walk out from the upper house of parliament against this measure, the prime minister directed the federal Finance Minister Dr Abdul Hafeez Sheikh to take parliamentary parties into confidence and devise a strategy to give relief to the poor. Although the prime minister tried to present OGRA’s decisions as autonomous of government influence, the fact that the government can direct OGRA to withdraw the hike belies this claim. OGRA’s price mechanism links the domestic prices to international prices and the increase in international prices owing to the political crisis in the Middle East has mandated the increase in domestic prices, but this is not the whole truth. Part of the problem is that the government earns substantial revenues by taxing various stages of refining and sale of petroleum products. For an economy that relies heavily on indirect taxes for revenues and invests very little on development, this is perhaps one of the very few choices available to it for raising revenues in the current circumstances. Thus Prime Minister Gilani’s reference to the Rs 35 billion oil subsidy in fact means the government would be foregoing part of these revenues.

The further slashing of the revenues of an already cash-strapped government is a cause for concern, but this should be compared with the burden on the masses due to not only the hike in prices of petroleum products, but also a cumulative sympathetic increase in prices of all other commodities and services, due to our heavy dependence on petroleum for meeting our energy needs. Already the transporters have increased fares in Punjab, while those in Karachi are threatening a hefty increase. The price of CNG and furnace oil has also risen after the POL increase. Likewise, there is going to be an impact on all other services and commodities. Can the economy absorb this impact? The government must strike a balance between its need for revenues and keeping the economy and masses afloat and not blithely ignore the effect of POL price hikes on various sectors of the economy and consumers. Compare our situation with India, which has decided not to increase POL prices in the aftermath of the Middle East crisis. Being a strong economy, India does not heavily tax this sector and has the capacity to absorb the jolts dealt by the international market. Being a weak economy, perhaps we cannot escape this impact entirely, but our decisions should be guided by realistic considerations where all the pros and cons are analysed rather than just looking at the compulsion to generate income to finance the yawning fiscal deficit. *

SECOND EDITORIAL: Doctors’ protest

The Young Doctor’s Association Punjab (YDA) is literally holding the province’s healthcare system hostage, but not necessarily unfairly. The strike called by the junior medical professionals aims to address many glaring issues such as raising abysmally low salaries, regularisation, medical facilities for the families of young doctors and job security among others. These demands have been voiced by the YDA for as long as a year now but medical professionals are only now making their angry voices heard, unfortunately, at the cost of innocent lives. Some 17 people have died because of the strike as the young professionals have closed the outpatient and emergency departments in various government hospitals, denying the sick emergency medical attention. As many as seven children have died due to lack of medical care. The YDA is careful to maintain that it is the junior doctors who are participating in this protest and that no senior doctor has been barred from attending to those most needy. On Friday and Saturday, many thousands of young doctors have resigned across the province.

It is no secret that doctors in Pakistan are overworked to an appalling degree, paid less than even police constables, guaranteed no medical coverage and have been made to work without pay on a number of occasions. This movement therefore has been a long time coming and has been echoing for change for months now. So why has the Punjab government been sitting back nonchalantly, allowing the situation to grow so devastatingly out of control? On Thursday night, the Punjab government failed to concede to the YDA’s demands with a no-show by Chief Minister Shahbaz Sharif, and now even more doctors have left the emergency wards in many government hospitals. The Punjab government has promised that the salaries will be revised in the upcoming budget (July 2011) but the doctors want this promise to be inked as, in the past, a similar such promise saw the CM pay the doctors mere peanuts to quieten down the protest movement. With the Punjab government citing the demanded salary raise (Rs 20,000-30,000) as too big a strain on the provincial budget (some Rs 26 billion) and sporting a very hard attitude to boot, it does not seem that the YDA is about to retreat anytime soon.

For the Punjab government to allow the situation to grow from bad to worse where patients are not getting life-saving treatment, is a testament to appalling management. The doctors’ demands are understandable; what is not is the attitude of the Punjab government, blustering and threatening young doctors with dismissal in one breath, and conceding some salary raise in the other, neither of which has served any other purpose than stoking the fire. g

Source : http://dailytimes.com.pk/default.asp?page=2011\04\03\story_3-4-2011_pg3_1

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