Is it Possible to Provide Cheap Petrol to Motorcyclists?

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Today, the federal government discussed a proposal to provide motorcyclists with cheap petrol. As per news reports, to avoid an objection by the IMF, roughly Rs. 150 billion annual subsidy on account of Rs. 25 to Rs. 50 per liter is planned to be recovered from car owners. The sources have claimed that the proposal is to raise the petrol price from Rs. 300 to Rs. 325 per liter for car owners but reduce it to Rs. 250 to Rs. 225 per liter for motorcyclists.

What Experts Say? 

But the question arises, is it possible? Different economists and analysts have shared their thoughts on Twitter to answer this question and discuss this new policy. Economist Ali Khizar thinks this new policy is “not doable ” as he wrote: “Petrol sales – 875 million liter per month this year, while motorbikes on the road are 24 million. Assuming each bike consumes 20 liters in a month, meaning 480 million liters, making it 55% of total petrol sales. This is too big a fiscal hole, and its implementation is extremely difficult.”

Another analyst, Ammar Khan, said that at a subsidy of PKR 40 per liter and assuming even minimal consumption of 1.5 liters/day, a subsidy of about PKR 43 billion per month, or PKR 500 billion+ per year. He thinks the government can launch 20 mass transit projects like Green Line in this amount.

Commenting further, he wrote that this plan of providing subsidized petrol to bikers is brought up every six months and fails every single time. “The operational execution (and will) required for implementation doesn’t exist. It creates adverse incentives and will not be acceptable to the IMF,” he added.

Mentioning the flaw in this proposal, investor and economy commentator Abdul Rehman wrote that the owners of luxury cars like V8 would use motorcycles to fill up their cars.

In conclusion, this cheap petrol for motorcyclists policy is not new and has been prepared by the previous governments but never succeeded. Furthermore, the practical implementation is almost impossible and will be a massive burden on the economy. The comments by the economists and analysts show that this plan will remain in words, and we will not see it in real.

What do you think about this cheap petrol policy for motorcyclists? Is it feasible? Please share your thoughts in the comments section.

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1 Comment
  1. ABCD says

    Plans made by people living in a parallel universe, unaware of ground realities and what can be implemented.

    These people should be sent to the petrol pumps to fill up a few hundred vehicles before they sit down to make plans like these.

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