Petroleum subsidy.

THE proposed petroleum subsidy programme intended to provide relief to low-income segments of the population appears to be a last-ditch effort by a politically embattled government to regain lost space as it faces both pressure from the opposition and high inflation which could harm its electoral prospects.

On the face of it, the move is likely to prove a non-starter; it will be difficult, if not impossible, to pursue it under the IMF should Islamabad strike the long-awaited deal with the Fund despite this new plan.

The scheme presupposes that the subsidy will reach every targeted individual, will not be misused and that its cost - estimated at Rs120bn - can be cross-subsidised by charging an additional tax of Rs100 per litre on petrol consumed by 'affluent' sections. The designers of the programme have yet to explain their definition of 'affluent'.

Details of how the scheme is going to be implemented remain sketchy. If the idea is to give the fuel subsidy to BISP beneficiaries, the government had a more practical way of increasing their stipend under the social protection programme, rather than creating new market distortions and risking the IMF programme.

After all, how many BISP beneficiaries own motorbikes, rickshaws or small cars? Even if the proposal is implemented without hiccups, it will not help the ruling set-up recoup its political capital.

At the most, the Robin Hood effect the move may create will retrieve only narrow space for the PML-N and its allies - definitely not enough to improve their electoral chances. The move is going to strengthen the...