NA panel demands immediate withdrawal of oil price increase

Petroleum ministry to send recommendations to PM, cabinet.

Our Correspondent August 01, 2012

ISLAMABAD: A parliamentary panel has questioned the Ministry of Petroleum and Oil and Gas Regulatory Authority (Ogra) about the fresh increase in petroleum product prices and sought its immediate withdrawal in order to provide relief to the consumers.

The National Assembly Standing Committee on Petroleum and Natural Resources, in a meeting held here on Wednesday and chaired by Engineer Tariq Khattak, agreed that the petroleum ministry would send a summary to the prime minister and Cabinet Division, containing recommendations of the penal for withdrawing the increase in oil prices.

Criticising the massive increase of up to 9% in oil prices, committee member Jamshaid Dasti alleged that Adviser to Prime Minister on Petroleum and Natural Resources Asim Hussain had become a tool in the hands of ministry officials, who had joined hands with the oil traders to exploit the consumers. He said the petroleum ministry and Ogra officials had pocketed millions of rupees from the traders and claimed that he had proof of this.

The adviser rejected the allegations, saying the committee member should avoid personal attack and the government was following an open and transparent formula to determine oil prices.

The committee members also expressed reservations about leaking of information to the media before the revision in oil prices, which sparked profiteering and hoarding on the part of oil traders.

Pointing to another problem, committee member Aftab Sheikh alleged that only influential dealers succeeded in getting diesel supplies in large quantities while some were denied the supply of oil.

Responding to this, the petroleum adviser said the ministry was aware of the issue and had written a letter to oil marketing company Pakistan State Oil (PSO), asking it to avoid such practice.

He stressed that the ministry had followed a transparent formula for setting prices of petroleum products and anyone could forecast fluctuations in prices in coming days. “The petroleum levy was imposed on oil products by parliament. If you want reduction in oil prices, parliament should waive taxes,” he said.

CNG stations closure opposed

The NA panel also fiercely opposed a proposal of the petroleum ministry that called for phasing out 15-year-old compressed natural gas (CNG) stations, saying it was the fundamental right of people to do business in the country.

The panel chairman pointed out that CNG station owners had invested billions of rupees, so the old stations should be allowed to continue to work.

The petroleum adviser said the country was facing gas shortage, leading to closure of four fertiliser plants, adding this had created urea shortage and the government would have to pay a subsidy of Rs50 billion on imported urea.

To cope with the gas shortage, he suggested the premier to shut 15-year-old CNG stations.

Gas theft

Speaking at the meeting, Sui Northern Gas Pipelines Managing Director Arif Hameed said the local administration was not cooperating with the company in taking action against the consumers involved in gas theft. Police had also refused to take action against textile millers in Faisalabad, he said.

“We tried to cut gas supply to two CNG stations in Khanpur, which were involved in gas theft, but police stopped our employees,” he said, but added gas supply to the textile mill owned by Foreign Minister Hina Rabbani Khar was discontinued.

According to Hameed, 1.865 billion cubic feet of gas per day (bcfd) was available in the system while demand stood at 2.6 bcfd. The shortfall will increase to 900 mmcfd in December and will further widen to 1.1 bcfd in January 2013.

Published in The Express Tribune, August 2nd, 2012.