Profit margin for OMCs
FROM the point of view of inflation-stricken consumers, the demand for a 100pc increase in the profit margins of the oil-marketing companies appears quite unreasonable. This is especially true considering the pain the consumers feel at the pump every day thanks to record-high petrol and diesel prices, caused primarily by excessive currency depreciation in recent months. Another argument against the increase of Rs6 per litre on petrol and diesel to Rs12, demanded by the OMCs, is that the government had raised their profit margins by 25pc just six months ago. But the OMCs are justified in asking for a further increase since the cost of doing business has surged considerably, mainly because of record-high headline inflation (36.5pc) in April, with interest rates of 22pc to 23.5pc. Rising inflation is hurting businesses as much as it is the common people. Financing costs too are eating into their profits.
Nevertheless, the demand for such a huge spike in margins is unreasonable considering the recent financial results of OMCs, showing solid balance sheets on the back of reasonable profits. Even if they think they are not making sufficient profits at the moment, their survival is not at stake, contrary to what they have claimed in their letter to the government. Thus the OMCs should reconsider their demand in the present difficult economic circumstances. Before taking a final decision either way, the government should sit with the OMCs to find a middle way to protect both the consumers and firms. One such way would be for both sides to agree to a mechanism that incorporates the impact of the price inflation on the companies’ margins annually. The companies should also agree on a time frame to improve their product quality, one of the reasons the last increase was allowed. Asking consumers to pay a higher price for a low-quality product to improve the balance sheets of oil companies isn’t justified at all.
Published in Dawn, May 4th, 2023
Slight thaw
THERE is room for optimism as the PDM government and the opposition PTI sit across the negotiating table, at long last, with the intention of reaching a political settlement that would lead to polls. This is no mean feat, given the two sides’ deep mutual animosity. But there has also been confusion regarding reports that there was agreement for elections to all assemblies to be held simultaneously though no date had been set — with PTI’s Shah Mehmood Qureshi sticking to the May 14 deadline for the Punjab polls. Indeed, the PTI in a report to the Supreme Court yesterday reiterated this stance.
Still, while there is always a possibility that the talks won’t go far, it is almost unbelievable that the two sides can actually sit together to have a sensible conversation. Over the last few years, such political maturity has eluded practically all forces in the country, elected or unelected, as they have been engaged in a dangerous game for power at the cost of democracy. The bitterness between the political groups that escalated after Imran Khan came to power and unleashed a so-called accountability campaign against his opponents had shown no signs of abating after his ouster. Mr Khan and his ministers were unflinching in their refusal to engage with the opposition. Even when he was removed from office, the country witnessed much political drama. Now, credit must be given to the PDM government, that, despite the reservations of some senior figures like Khawaja Asif and Javed Latif, has managed to work towards a consensus. The far-sightedness of those in favour of negotiations on both sides was much needed. For too long, political acrimony and divisive tendencies have caused suffering to Pakistan’s people. These talks give hope that a political settlement on the date of the polls can be reached, and that the country can come out of its present quagmire. The government should show flexibility and consider holding the polls soon. The PTI, too, should not fixate on May 14 as the date for the Punjab polls, and meet the government halfway. If the two sides agree, it will be a victory for democracy. It will also be a message to forces that thrive on political chaos that even at a time of crisis, our politicians have the ability to find a way to continue the democratic process.
Published in Dawn, May 4th, 2023
On the warpath
THE ugly confrontation between the pillars of state shows no signs of easing. The nation witnessed as much on Tuesday, when the National Assembly challenged the Supreme Court for summoning the record of parliamentary proceedings of a law limiting the chief justice’s powers. The lawmakers’ concerns were not out of place.
For while legal interpretations may wary, Articles 66 and 69 of the Constitution, invoked by the Public Accounts Committee chair in the National Assembly, underscore parliamentary independence in matters taken up by the House. Undue interference in parliament’s affairs by the court then will be seen as breaching the constitutional boundaries — even if in this case the SC merely summoned the record.
A series of events, linked to electoral issues, have led to the current impasse — with both sides erring in their decision to not budge an inch from their respective positions. This was evident in the formation of benches, with the SC refusing to satisfy the government’s demand for a full court to examine the ECP’s postponement of polls to the Punjab Assembly, and its pre-emptive action against the law mentioned above.
It was equally apparent in the government’s open defiance of the SC order to hold polls within 90 days — a constitutional requirement — to the Punjab and KP assemblies.
No matter how one sees the situation — as one in which parliament has rightly decided to defend its sovereignty or one where the judicial writ is being thwarted by those who are avoiding the people’ mandate — the end result is bound to be disastrous if we continue on this trajectory.
The language of moderation is key to effective diplomacy in the international arena. It may work within the country too and help institutions see the larger picture and understand how they can progress on sticky issues, without adopting a combative stance in deeds or words.
For instance, in his hard-hitting speech in the Assembly on Tuesday, Defence Minister Khawaja Asif made a strong point about the accountability of the court itself as he correctly referred to inglorious periods in the institution’s history. But to say that if “they want a war, then there will be war” sends an alarming message.
As does the PAC chair’s threat to issue arrest warrants for the SC’s principal accounting officer if the official refused to brief the Assembly. With both the legislative and judicial branches having overstepped the bounds in this tussle, a paralysis has set in and is affecting the functioning of the state.
The country’s economic prospects are weak and social institutions are on the point of disintegration. The only way out is fresh polls: the talks between PDM and the PTI have shown some progress on this count and hold the key to the problem.
Published in Dawn, May 4th, 2023