The Supreme Court on Monday distanced itself from the CNG price fixing saga and said it was the prerogative of the relevant authorities and stakeholders to agree on prices.
Heading a three-judge bench of the apex court, which also comprised Justice Sheikh Azmat Saeed and Justice Gulzar Ahmad, Chief Justice Iftikhar Muhammad Chaudhry said that it was the government’s domain to issue policy guidelines to the Oil and Gas Regulatory Authority (Ogra) to determine and fix petroleum prices. The court asked Ogra to devise a reasonable pricing formula till December 5, keeping the interest of consumers in mind.
“We are only concerned about the constitution and the fundamental rights of the citizens,” CJ Chaudhry said, adding that as per the law, Ogra could not regulate prices without government policy guidelines. The court also complained about sub-standard gas being supplied to some gas stations.
Justice Saeed observed, “There is no legislation, no administration and everything is going outside.”
Salman Akram Raja, Ogra’s counsel, conceded to the court that at present, the affairs of the authority was being run on an ad hoc basis. To a query, Raja said as far as the formula of prices was concerned, Ogra was regulating merely on the basis of a memorandum of understanding between Ogra and CNG stations owners, which was cancelled when the court deemed it illegal.
In the absence of policy guidelines from the federal government, Raja said, Ogra was determining prices on the basis of legitimate costs and a fair return.
The apex court pointed out that in the current setup, Ogra was bearing all the operational costs of CNG stations, including the electricity bill. The court also questioned the process of issuing of licences by Ogra for CNG stations. “Why did this licence not mention the price formula and its contents?” the chief justice asked.
Justice Ahmad observed that it seemed such lucrative rules were made by none other than owners of CNG stations. CJ Chaudhry said that in the name of CNG stations, a huge chunk of the National Highway Authority’s (NHA) land had been occupied by private investors, adding that licenses were being issued based on favouritism.
The apex court was informed that some 3,400 CNG stations were operating in the country, while Punjab alone had 2,600. Raja told the court that 90% of the licences were issued during the years 2004-2005.
The court also sought from Ogra the year wise break-up of CNG stations since 2002 and public land being encroached in the name of these CNG stations.
Abdul Hafeez Pirzada, the counsel for CNG owners, told the court that the present price formula was wrong and CNG owners were facing massive losses. He said that as per the auditor’s recommendations, per kg price of CNG should be at least Rs74, while as per Ogra’s own assessment, per kg price should be Rs65. Citing Ogra, he said that CNG owners were facing a loss of Rs11 per kg.
Pirzada said that CNG owners should not be arrested if they were closing down their stations. The chief justice observed that as per the constitution, they could not be arrested. However, Ogra could cancel their licences if they were not able to continue their business.
The counsel for the CNG Association Sindh, Wasim Sajjad, asked the court to direct Ogra to fix new prices. The chief justice said that the court would not go into the nitty-gritty detail of price fixing. But, he said, Ogra could announce new prices in consultation with stakeholders. The bench also asked Ogra to ask the government to issue policy guidelines for this purpose and inform the court about it on December 5, the next date of hearing.
Published in The Express Tribune, November 20th, 2012.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ