SC grills petroleum ministry over CNG, LPG price fixing formula
A three-judge bench, comprising Chief Justice (CJ) Iftikhar Mohammad Chaudhry, Justice Jawwad S Khawaja and Justice Khilji Arif Hussain, took up the issue of the implementation of recommendations contained in Justice (retired) Rana Bhagwandas' report, who had served as judge of the apex Court.
In its order, the bench directed the concerned authorities to explain the linkage between prices of CNG and petroleum products, price ratio with components, decision of the Economic Coordination Committee (ECC) allowing the Oil and Gas Regulatory Authority (OGRA) and ministry of petroleum to raise prices on weekly basis.
During the proceedings, the CJ asked the secretary for ministry of petroleum Waqar Masood to explain why prices of CNG were raised, hence affecting the ‘poor’ consumer, when as per Justice (retd) Bhagwandas' report it could be sold for as low as Rs17 per kilogram.
The secretary replied that Justice (retd) Bhagwandas' report was the best one and submitted an implementation report, adding that the report did not mention CNG and dispelled the impression that the prices of CNG were raised without following any prescribed process.
Explaining the method of determining CNG prices, Masood said that the ECC approved hike in gas prices, while OGRA was only a downstream regulator which implements guidelines provided by the government as highlighted in section 21 of the OGRA ordinance.
Masood said the CNG prices were linked with the petroleum products with which it maintains 60 per cent price parity. He, though, lamented that while the CNG sector has witnessed phenomenal growth and Pakistan remained an ideal place for Exploration and Production (EN&P) activity, little has been done to expand resources.
The CJ observed that the government should have entered into an agreement with companies for a set period of time instead of revising prices daily.
The secretary petroleum replied that Pakistan has to import 85 per cent of the petroleum products that it consumes while fluctuations in prices of CNG on a weekly basis has in fact provided relief to the public.
Justice Khawaja observed that after the 18th Amendment, the issue to determine prices does not rest with the ECC, rather it is an issue which should be raised with the Council of Common Interest (CCI).
Why should the domestic user suffer?
The CJ directed his attention to the use of natural gas by domestic consumers and said that it was the ‘poor consumer’ who had to suffer in its stead.
The secretary contended that due to distribution among various sectors, domestic consumers were in fact benefiting from subsidies worth Rs46 billion. OGRA chairman Saeed Ahmad Khan who was present at the proceedings told the court that the minimum price for the domestic consumer was between Rs175 and Rs180 per MMBT, including distribution and expenditure costs.
The Chief Justice asked the secretary to explain on the next date of hearing how many oil refineries the ministry has developed using the petroleum development levy.
The hearing was adjourned till October 24.
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1719053250-0/BeFunky-collage-(5)1719053250-0-270x192.webp "non solar consumers bear rs200b burden")
@whab: Maybe if the NAB was doing it's job properly the court would not have to step in? But in typical Pakistani fashion, we are happy hitting the axe on our own foot by targetting the only institution in the country that is doing some form of accountability.
Recovering Billions of Rs. in price fixing fraud is not wastage of time in my dictionary.
What has court to do with petroleum prices. This is purely administrative matter. CJ should stop wasting his own time and of secretaries of govt. With thousand of casing pending in Supreme court, CJ should have common sense to noWhat has court to do with petroleum prices. This is purely administrative matter. CJ should stop wasting his own time and of secretaries of govt. With thousand of casing pending in Supreme court, CJ should have common sense to not to take such cases.t to take such cases.