Petrol crisis: Ministers draw flak in Senate panel’s meeting

Petroleum minister unable to satisfy senators’ queries

ISLAMABAD:

A Senate panel failed to reach a logical conclusion in its inquiry into the recent petrol crisis in Punjab as two key ministers did not show up in its meeting on Friday.

The meeting of the Joint Senate Committee on Petroleum was convened for the first time to look into the reasons behind the fuel crisis but Finance Minister Ishaq Dar and Water and Power Minister Khawaja Asif skipped the session.

Minister for Petroleum Shahid Khaqan Abbasi attributed the petrol crisis to a ‘sudden increase’ in demand and panic created by the media. He predicted that petrol would become cheaper than CNG after a further cut in prices in February.



Some participants of the meeting alleged that the two ministries – Dar and Asif – were responsible for the petrol crisis and staged a token walkout from the meeting.

Senator Abdul Nabi Bangash said the ministers were not willing to take responsibility, while some bureaucrats have been made a scapegoat. Senator Moula Bakhsh Chandio said that since the pair wielded considerable influence in the cabinet, they did not bother to attend the meeting.

Some senators demanded an independent inquiry into the matter. Senator Nasreen Jalil said a report would be submitted in the Senate session on January 31 and a motion would be moved asking the government ensured such situations did not emerge in the future.

Senator Sughra Imam asked how much money the oil cartels had minted by overpricing in connivance with government departments. “It is too early to determine,” said Petroleum Secretary Arshad Mirza.

However, the Oil and Gas Regulatory Authority (Ogra) chairman said it has come to their knowledge that at some places petrol was sold over Rs300 per litre. He pointed out that Ogra’s responsibility was to ensure the oil marketing companies maintained 20-day storages.



The inquiry committee, headed by the chairman Board of Directors of the Oil and Gas Development Company Limited (OGDCL), Zahid Muzaffar, and one board member Zafar Masood, had blamed Ogra within 48 hours for not maintaining oil stocks for 20 days.

“Ogra has no role to ensure 20-day stock of products under the law,” he argued, adding that Ogra issues licences after ensuring development oil storages for 20 days. He further said that Ogra had given two licences whereas 11 licences were given by the petroleum ministry and transferred to the regulator later.

While arguing that the petrol crisis had no link with power or finance ministries, Khaqan Abbasi failed to answer several questions raised by the senators. He suggested that oil market should be deregulated as its regulation had discouraged investment in the oil sector.

Similarly, he could not answer why the petroleum secretary, Pakistan State Oil’s managing director and other officials were suspended without serving any charge-sheet.

However, the petroleum minister put responsibility on the media, insisting that it had created panic which led to the petrol crisis. “The prime minister thought it better to suspend them before initiating an inquiry into petrol shortages,” he said, adding that a sudden increase in demand was the major cause of petrol shortage.

Shutdown of Pak-Arab Refinery and National Refinery Limited were also the reasons for the fuel shortage, he claimed.

He also ruled out that the PSO was facing any financial issue in importing of petrol. “The PSO has never defaulted and its bank credit lines have not been chocked,” the petroleum minister said. However, he could not respond to a question raised by Senator Talib Baloch that the PSO had defaulted to LCs worth Rs45 billion.

The PSO management had also pointed out in its letters that the entity had defaulted to LCs the same amount.

Water and Power Secretary Younis Daga said his ministry was not responsible for petrol shortages. “The PSO has provided oil worth Rs45 billion since November and we have paid Rs69 billion,” he said.

Finance Secretary Waqar Masood said the government had cleared Rs480 billion after coming into power but the circular debt has again started rising due to price difference in the power cost. “The finance ministry has financed Rs967 billion during the last 18 months,” he said.

Published in The Express Tribune, January 24^th, 2015.