The continuing hike in the prices of motor gasoline, popularly called 'petrol,' is being widely criticized. The following paragraphs are an attempt at looking for measures which may help in reducing our dependence upon petrol.
Historically, we observe an increment of 15 times in Pakistan’s consumption of petrol from 12,500 BPD in 1980 to 195,000 BPD in 2021. The number seems quite high even when considered vis-a-vis the population growth during the period. The anomaly accentuates further when we realize that our annual per capita consumption of motor gasoline for 2020 comes out to be 0.309BBL, while that of China, Turkey, India and Bangladesh is, respectively, 0.7927 BBL, 0.2236 BBL, 0.1708 BBL and 0.011 BBL. The consumption used to hover around 20000 BPD till 2006. Then it took a few jumps and reached to 36000 BPD in 2008. From there onward it increased in great leaps and tripled from ~65000 in 2010 to 195,000 BPD in 2021. Even China observed an increment of only 50% in the consumption during the period, while its GDP ramped up from ~6 to 15 Trillion USD. Thus the abnormal increase in our case is not really a function of economic development and it needs detailed analysis.
Comparative analysis: how the Chinese run their railways
No sustainable economic development has been observed without a robust and agile system of logistics and mobility for the masses. In the modern industrial era, this means a wellhoned arrangement consisting of railway, roads, public & private transport etc; with all the segments complementing each other. In our case; though we inherited a highly developed railway system catering to more than 90% of the passenger and 100% of the freight requirements; it now caters to only 4% each of the requirements of both the segments. As to the causes of this decline; in all success stories we find high level of professionalisation of every relevant forum. E.g. the Chairman of China Railway had started his career from the lowest rungs in the railway system as a track maintenance worker in the 1970s. Out of the remaining 8 board members, 6 are hardcore railway professionals. As a result, the country is able to successfully manage a 20 times larger system.
With the given professionalisation, China has achieved a wonderful haulage mix of 15% of its domestic freight through railway, 53% through transportation via inland waterways and the rest through roads.
Juxtaposing Pakistan Railways with the Chinese example immediately highlights the major cause for its collapse. Its board comprises of 10 members with 7 ministry officials and 3 private members; two out of whom are also retired government servants. Thus the most critical forum lacks the required capacity in terms of professional knowledge and experience.
It may be interesting for the readers that Pakistan Railways used to have a professional board till it was merged with the ministry in 1989 and Secretary Railways assumed charge as chairman. Thereafter, professionals lost their primacy on the board. As per the records, the institution had always remained in profit till then.
The situation post- 2007/2008
As mentioned above, in our case the consumption of petrol suddenly takes a vertical trajectory around 2007/8, which continues till today. Amongst other factors, the rapid rise also reflects a new downward leap in the performance of Pakistan Railways. It was catering to 10% of the inland national traffic in 2007, which now stands at a meager 4%. The passengers’ traffic started dwindling since 2008 and fell by ~40% till 2014. As to the freight segment; it virtually remained suspended since 2010 till 2014. The decline caused increment in traffic on the roads.
Another major contributory factor is the decline in the use of bicycles. Our annual cycle manufacturing has come down to 1/3rd of what it was in 2001 i.e. ~600,000 cycles. India and Bangladesh annually manufacture, respectively, more than 20 million and 2 million bicycles - with Bangladesh exporting ~1.2 Million to 24 countries.
Bicycling is playing a key role in managing the energy mix of many countries. For instance, in Denmark, 16% of all trips are made on bicycles, with 50% of school students using them for commuting to schools. Also India is the third largest user of bicycles, while the consumption of Bangladesh is also four times higher than Pakistan.
The above analysis would be incomplete without taking into account our abject failure to establish a credible public transport system. Historically, while we continued to allocate funds for roads’ infrastructure; public transport and railways generally remained pariahs. By the early 2000s, all attempts towards a viable transport system of state owned buses had failed. Even most of the pertaining institutional infrastructure had also disappeared. Similarly, with a few exceptions, large private contractors avoided to shoulder the burden. Thus, poorly maintained private buses, shabby vans and Suzuki pickups honking around, cramped with passengers, soon became a routine of our urban scenery.
A major off-shoot of the above situation proved to be the inundation of the roads with two- and three-wheelers. We observe an increment of 3.5 times in the number of motorcycles from 2.7 Million in 2006 to 12.4 Million in 2015; touching 17.5 Million in 2018. Similarly there was an increment in the registration of three-wheelers by 3 times from 136,394 in 2006 to 544,792 in 2015. Undoubtedly it did give major impetus to the motor cycle industry in Pakistan i.e. while the production was 327, 446 in 2004; it crossed 2.8 million in 2018. This rapid increase, generally presented as a sign of affluence, has resulted in additional import bill of billions of US dollars and undue traffic load on the roads. Another major casualty is, of course, the atmosphere. The 2020 World Air Quality Report ranks Pakistan as the 2nd worst country after Bangladesh in terms of air quality with fossil fuel emissions as a major cause. Thus this 'success' is rather a symptom of a serious affliction i.e. failure of governance.
What is to be done?
I understand that the following measures can help in addressing the issue:
a) Integrate all transport functions under one ministry
b) Revamp the governance structure of the sector in the light of available international precepts. A tier of professionals at the top steering the entire sector is essential
c) Revive the pre-1989 governance structure for Pakistan Railways
d) Facilitate the production, usage and export of bicycles with aggressive targets
e) Start looking for export markets for two- and three-wheelers
f) Start diverting maximum possible funds to Pakistan Railways and looking for options other than CPEC for realizing ML-1. Mobilisation of an investment of around USD 6-7 billion supported by viable business models may not prove to be as difficult as it seems. China can also be one of the partners, of course.
The above steps would not only reduce petrol consumption by at least half - thus enabling us to save around USD 3 billion per year - but they would also help in reducing air pollution. In addition, they would, of course, unleash an unparalleled era of economic independence and development for the country.
Historically, we observe an increment of 15 times in Pakistan’s consumption of petrol from 12,500 BPD in 1980 to 195,000 BPD in 2021. The number seems quite high even when considered vis-a-vis the population growth during the period. The anomaly accentuates further when we realize that our annual per capita consumption of motor gasoline for 2020 comes out to be 0.309BBL, while that of China, Turkey, India and Bangladesh is, respectively, 0.7927 BBL, 0.2236 BBL, 0.1708 BBL and 0.011 BBL. The consumption used to hover around 20000 BPD till 2006. Then it took a few jumps and reached to 36000 BPD in 2008. From there onward it increased in great leaps and tripled from ~65000 in 2010 to 195,000 BPD in 2021. Even China observed an increment of only 50% in the consumption during the period, while its GDP ramped up from ~6 to 15 Trillion USD. Thus the abnormal increase in our case is not really a function of economic development and it needs detailed analysis.
Comparative analysis: how the Chinese run their railways
No sustainable economic development has been observed without a robust and agile system of logistics and mobility for the masses. In the modern industrial era, this means a wellhoned arrangement consisting of railway, roads, public & private transport etc; with all the segments complementing each other. In our case; though we inherited a highly developed railway system catering to more than 90% of the passenger and 100% of the freight requirements; it now caters to only 4% each of the requirements of both the segments. As to the causes of this decline; in all success stories we find high level of professionalisation of every relevant forum. E.g. the Chairman of China Railway had started his career from the lowest rungs in the railway system as a track maintenance worker in the 1970s. Out of the remaining 8 board members, 6 are hardcore railway professionals. As a result, the country is able to successfully manage a 20 times larger system.
With the given professionalisation, China has achieved a wonderful haulage mix of 15% of its domestic freight through railway, 53% through transportation via inland waterways and the rest through roads.
Juxtaposing Pakistan Railways with the Chinese example immediately highlights the major cause for its collapse. Its board comprises of 10 members with 7 ministry officials and 3 private members; two out of whom are also retired government servants. Thus the most critical forum lacks the required capacity in terms of professional knowledge and experience.
It may be interesting for the readers that Pakistan Railways used to have a professional board till it was merged with the ministry in 1989 and Secretary Railways assumed charge as chairman. Thereafter, professionals lost their primacy on the board. As per the records, the institution had always remained in profit till then.
The situation post- 2007/2008
As mentioned above, in our case the consumption of petrol suddenly takes a vertical trajectory around 2007/8, which continues till today. Amongst other factors, the rapid rise also reflects a new downward leap in the performance of Pakistan Railways. It was catering to 10% of the inland national traffic in 2007, which now stands at a meager 4%. The passengers’ traffic started dwindling since 2008 and fell by ~40% till 2014. As to the freight segment; it virtually remained suspended since 2010 till 2014. The decline caused increment in traffic on the roads.
Another major contributory factor is the decline in the use of bicycles. Our annual cycle manufacturing has come down to 1/3rd of what it was in 2001 i.e. ~600,000 cycles. India and Bangladesh annually manufacture, respectively, more than 20 million and 2 million bicycles - with Bangladesh exporting ~1.2 Million to 24 countries.
Bicycling is playing a key role in managing the energy mix of many countries. For instance, in Denmark, 16% of all trips are made on bicycles, with 50% of school students using them for commuting to schools. Also India is the third largest user of bicycles, while the consumption of Bangladesh is also four times higher than Pakistan.
The above analysis would be incomplete without taking into account our abject failure to establish a credible public transport system. Historically, while we continued to allocate funds for roads’ infrastructure; public transport and railways generally remained pariahs. By the early 2000s, all attempts towards a viable transport system of state owned buses had failed. Even most of the pertaining institutional infrastructure had also disappeared. Similarly, with a few exceptions, large private contractors avoided to shoulder the burden. Thus, poorly maintained private buses, shabby vans and Suzuki pickups honking around, cramped with passengers, soon became a routine of our urban scenery.
A major off-shoot of the above situation proved to be the inundation of the roads with two- and three-wheelers. We observe an increment of 3.5 times in the number of motorcycles from 2.7 Million in 2006 to 12.4 Million in 2015; touching 17.5 Million in 2018. Similarly there was an increment in the registration of three-wheelers by 3 times from 136,394 in 2006 to 544,792 in 2015. Undoubtedly it did give major impetus to the motor cycle industry in Pakistan i.e. while the production was 327, 446 in 2004; it crossed 2.8 million in 2018. This rapid increase, generally presented as a sign of affluence, has resulted in additional import bill of billions of US dollars and undue traffic load on the roads. Another major casualty is, of course, the atmosphere. The 2020 World Air Quality Report ranks Pakistan as the 2nd worst country after Bangladesh in terms of air quality with fossil fuel emissions as a major cause. Thus this 'success' is rather a symptom of a serious affliction i.e. failure of governance.
What is to be done?
I understand that the following measures can help in addressing the issue:
a) Integrate all transport functions under one ministry
b) Revamp the governance structure of the sector in the light of available international precepts. A tier of professionals at the top steering the entire sector is essential
c) Revive the pre-1989 governance structure for Pakistan Railways
d) Facilitate the production, usage and export of bicycles with aggressive targets
e) Start looking for export markets for two- and three-wheelers
f) Start diverting maximum possible funds to Pakistan Railways and looking for options other than CPEC for realizing ML-1. Mobilisation of an investment of around USD 6-7 billion supported by viable business models may not prove to be as difficult as it seems. China can also be one of the partners, of course.
The above steps would not only reduce petrol consumption by at least half - thus enabling us to save around USD 3 billion per year - but they would also help in reducing air pollution. In addition, they would, of course, unleash an unparalleled era of economic independence and development for the country.