THE government's economic mandarins are caught between the rock and a hard place. On one hand, they have been asked by international agencies to move towards liberalization in their economies and less government intervention, specially in the newer, globalised world. On the other hand, rampant inflation and other market mismatches are forcing the government to intervene, regulate, subsidise, tax; the works in other words, as far as economic management is concerned. Governments have to take decisions sometimes. And so it appears to have done when in a meeting between Finance Minister Naveed Qamar and World Bank Vice-President Praful Patel, the Government assured the Bank of an end to the subsidy on oil. And it isn't just the issue of liberalization; subsidies cost the government a lot, and they are tempting to let go when budget deficits are huge. But what exactly is a subsidized product? An item can either be subsidized, taxed or left alone. Petroleum products, being heavily taxed, serve as a significant source of revenue for the government. If removal of this elusive subsidy, wherever it is, can raise the rates, then perhaps a lowering of these taxes would be in order.