To claim your fuel relief, you will text your CNIC number, your registration plate, the first letter of your province and your vehicle’s registration date to 9771. Then, each time you approach a pump, you will text the word TOK to the same number and wait for a token.
If you ride a motorcycle, this is worth five litres a week, capped at twenty a month. Two thousand rupees, if you claim every one of them, every week, without fail.
The petroleum levy on each of those litres is Rs80. It has not changed.
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We finally have the breakdown. On Sunday I complained in this column that three different per-litre tax figures were circulating — Rs114, thirty-seven per cent, Jamaat-i-Islami’s Rs130 — and that nobody had published a clean statement of what sits inside a litre of petrol. The ECC’s decision contains one: Rs80 petroleum levy, Rs5 climate support levy, Rs21 customs duty. Rs106, before whatever else is layered on top.
So the argument can now be had on agreed numbers, which is progress, and I should say so before saying anything else.
What the government has decided to do with those numbers is the interesting part. It is collecting Rs106 a litre from everyone and returning Rs75 billion of it, over three months, to some people, through a registration system. The relief is stated as about sixteen per cent of a single month’s levy collection.
That is not a concession on the levy. It is the opposite of one: it is an assertion that the levy stays, and that the state will decide who gets a rebate.
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I want to make the government’s case honestly, because there is a real one and it is not merely defensive.
A broad cut in the levy is a regressive instrument. It hands the largest benefit to whoever burns the most fuel, which means the man with the Land Cruiser gains many times what the man with the 70cc gains. Targeting is genuinely better distribution. Every economist who has looked at Pakistani fuel subsidies has said some version of this, and they are right.
And the money is not notional. A levy yielding what this one yields is funding a budget that would otherwise be funded by borrowing — and this same week a survey found sixty-six per cent of Pakistanis worried about the national debt, with only five per cent relaxed about it. The people demanding that the levy go and the people alarmed about the debt are substantially the same people.
So: targeted relief over a blanket cut is defensible. I do not think it is the wrong instrument.
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The difficulty is what the instrument requires of the person it is for.
He must own a phone that sends texts. He must have his CNIC number, his registration plate and the date his vehicle was registered — a document many second-hand motorcycles in this country change hands without. He must register correctly. He must remember to text TOK before every fill. He must reach a participating pump. He must do this four times a month, every month, or he simply does not receive the benefit that has been announced on his behalf.
Every one of those steps is a place where someone falls out. Not through fraud or fecklessness, but through the ordinary friction that has defeated every registration-based scheme this country has attempted. We know this. We have the entire history of the Benazir Income Support Programme, of subsidised flour schemes, of utility store queues, and the consistent finding is that the poorer the intended recipient, the higher the drop-out at each administrative gate.
A price cut requires nothing of anybody. It arrives whether you have your paperwork or not. That is its inefficiency and that is also its entire virtue.
What the government has chosen, then, is not simply targeting over breadth. It is a system whose reach depends on the administrative competence of the state and the documentary luck of the citizen — in a country where both are the problem being solved.
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There is a further thing, smaller and more awkward.
This morning petrol is Rs380.24 a litre, because the two-day pause ended and the daily mechanism resumed. The relief was calculated when the price was Rs375.82. Petrol has risen Rs34.37 in nine days.
Rs100 a litre off twenty litres is Rs2,000 a month for a motorcyclist. Today’s increase alone — Rs4.42 — takes about ninety rupees a month back from the same twenty litres, and the next one will take more. Nothing in the announcement suggests the relief adjusts as the price moves.
A subsidy fixed in rupees against a price revised daily is a subsidy with a short life, and everyone drafting it knows that.
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Jamaat-i-Islami marches on the twentieth. Its demand is the abolition of the levy, which is a bad demand in the sense that no replacement revenue has been named, and a serious one in the sense that Rs80 a litre is the largest thing in this price anybody in Pakistan actually controls.
The government’s answer is Rs75 billion and a shortcode. Whether that defuses the march is a political question I have no standing to forecast. Whether it reaches the man on the 70cc is an administrative question, and the honest answer is that we will not know for months, and that nobody will publish the take-up rate unless it is good.
I would settle for one commitment. Publish the number of registrations, and the number of tokens actually redeemed, monthly, for all three months. If the scheme works, the government gets the credit on the record. If it does not, we find out before the next one is designed the same way.
Text TOK to 9771. Somebody should be counting who does.
[Image: The Express Tribune]
