Sunday, May 18, 2008

gas, gas, gas

The increasing price of gas and oil is finally beginning to effect our locale. That sounds surprising certainly because for the rest of the world this is really an old problem, prices have been on a steady increase for 2 years. Well here we subsidize gas. Yeah, and we're not a major oil producing country, but we subsidize gas. The country's budget includes it but over the first quarter of the year it became evident to even lawmakers that if they held the line on the subsidy they were facing a major budget shortfall. So in the spirit of good governance, they did what all governments do, they started going through the budget looking for things to cut. One of the departments being investigated was education. Now this caused immediate concern because by constitutional order 20% of the country's budget is to go toward education. Of course this has always been an ideal and has never happened. Presently if they add the civil service salary for educators to the education budget they get up to maybe 17%. So when they looked at making deeper cuts, people started to talk. At the same time, the government starts recieving pressure from foriegn owned business that something was going to be done to stabilize the gas subsidy deficit. End of March, first of April it really looks to be an issue and the country starts talking about the potential that sometime this summer something will have to be done, ie raising the price of gas. They don't even have a number on the table and people start talking protests. At the same time of talking raising the price, they say that they're working on a direct cash payback to the poor who will feel the sting the most. No good. Groups head to the local copy shop to prepare fliers and start protesting. Hoarding begins. Presently they have what sounds like for this gov't a good plan, a workable one anyway, and no one is happy. The gas stations are imposing buying limits.

We've lived through gas hoarding and gas rationing when we were in Africa. We've found that it is nearly impossible to control very well. Letting supply and demand take hold is really the best bet as far as we've seen because a person's wallet is the best rationer. Problem is that public transport is the most integral thing. People have to be able to get to work. So I have no idea what's coming next. Judging from the protests that have already started, its going to be a long, hot tempered summer. My recycle bin is going to fill with fliers.
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