On the verge of a crisis

THERE is no shortage of crises in Pakistan. The problem of wheat supply and its high price was not yet over when difficulties in another area appear to be very much on the cards. According to reliable sources, Pakistan’s stocks of major oil products have declined to the lowest ever level in the country’s history and reserves of kerosene and diesel are sufficient for six days only. The seriousness of the situation could be gauged from the fact that under the standard operating procedures (SOPs), the government and its companies are required to maintain a minimum of 21-day stock of every product all the time to cope with any eventuality. Country’s high speed diesel stocks at present are at around 125,457 tons as against the average need of about 22,000 tons per day. As the country has the capacity to store HSD for 39 days’ requirements, total usable stocks are only about 19 percent of the capacity, while current kerosene storage is only nine percent of the capacity. The situation is comparatively better for furnace oil, petrol, HOBC and jet fuel as their stocks are enough for 26 days, 15 days, 22 days and 20 days respectively. However, these stocks are also much lower than last year as is the storage capacity of the country. Some of the refineries are reported to have increased their jet fuel production that directly affects kerosene production because both are alternative products. The reason for the shift in production may be that kerosene is a subsidised product that affects oil companies’ cash flow in the wake of price differential claims to be lodged with the government, while jet fuel is generally sold to allied forces against cash payment. Obviously, this situation has not developed in a day or two but is the result of flawed policies and financial mismanagement during the last few months. No business concern can survive for long if its cash claims continue to pile up beyond a certain limit. Sooner or later, a stage will be reached when it may be forced to stop its supplies or services. The major reason for the drop in stocks of some POL products was insufficient imports due to increasing cash flow problems caused by the rising inter-corporate debt. The caretaker government, for example, now needs to increase the petrol price by Rs 17 per litre to improve the level of cash payment and rein in the mounting fiscal deficit but is hesitant to do that and may pass on the problem to the next government.
The government was obliged to pay Rs 14 billion subsidy per month on oil to oil marketing companies but has failed to clear the price differential claims. The arrangement of “bridge financing” is also not very satisfactory. The indecision or inaction could also result in overshooting the budgetary targets. Fiscal deficit was reduced from seven percent of the GDP in 1990s to 3.5 percent during the last six years with a lot of effort and resolve. Lax fiscal management should not be allowed to raise its ugly head once again. In any case, government’s capacity for deficit financing is now limited by FRDL. Evidently, the plummeting stocks of major oil products are a manifestation of a larger policy failure of the government. Thankfully, the news of decline in stocks is still confined to a limited circle and has not percolated to the public at large, otherwise some of the oil products might have disappeared from the market altogether due to panic-buying, causing a great damage to the industrial activity and overall economy. The common man in the northern areas of the country could particularly be hit hard in the winter season. We feel that there is still time for the government to meet the requirements of SOPs for such strategic commodities through properly designed measures, failing which a crisis still in the making could really come to pass.
 

Another assassination in Lebanon

IT’S yet another assassination, in Lebanon — the hapless nation whose people otherwise charm the world with their spirit of enterprise and qualities of heart and mind. Why is Lebanon not left alone from disasters such as the car bomb explosion that killed a top general and a few others on Wednesday, is a big puzzle. Answers must be found and Lebanon helped to move ahead with the times. Brigadier General Francois Al Hajj, head of army operations, and several bodyguards were killed in the early morning blast that hit his car in Baabda. Clearly, there’s a method in the madness. Communal overtones apart, the blast’s link to politics and the nine-times-postponed presidential polls is all too clear. Al Hajj was to take over as the head of the military in the event of the present head, General Michel Suleiman, being elected as president — the top political post that remains vacant since last month. Who gains by assassinating him? Theories are many. One, naturally, links the murder to Al Qaeda, but it does not have many takers. The needle of suspicion is more on Syria, as is the case every time similar things happen in Lebanon; and rightly so, in so far as that many consider Lebanon to be an outpost of Syria for its political manoeuvrings; and that parliament is currently in a limbo over the presidential poll, with those backing Syria and those opposing it battling things out. That as many as eight politicians who are said to be on the hit-list of Syria have been killed in the past two years, topped by the present killing, adds to the gravity of the situation there.
The unalloyed fact is, Lebanon has been a theatre of war for all the big players in the Middle East for so many years. Which was what brought many tragedies to visit on this land, including the assassination in 2005 of popular leader Rafik Hariri, whose entrepreneurial spirit coupled with a vision for his nation drove the engines of growth there for many years. Then came the war involving the Hezbollah and Israel. Lebanon’s economy was shattered by these tragedies, coming as it did one after another. With another major assassination taking place yesterday, the question on many a lip is this: what next? There must be an end to all this chaos. That is possible only if Lebanon’s own communities and parties are involved in the process of redefining the nation’s agenda. And, most importantly, a time must come when Lebanon will refuse to be dictated by big powers. Everybody knows that neighbours like Israel have been pushing their agenda at the expense of the Mediterranean country. So much so the world has lost the count of the number of politicians killed so far. When is it going to end? Only the people of Lebanon and their united resolve can end this cycle of violence.

—Khaleej Times