The Economic Coordination Committee (ECC), in its next meeting, is all set to take a decision on oil prices review following a resolution passed by the Parliament switching to monthly prices mechanism instead of weekly determination.
The Supreme Court had already suspended the weekly oil pricing mechanism after an undertaking given by the Ministry of Petroleum and Natural Resources. “Now, the ECC will take a decision whether weekly or monthly oil pricing mechanism should be adopted,” sources said.
“Yes, we have sent a summary to the ECC that will be taken up to decide on review mechanism of oil prices,” Federal Secretary for Petroleum and Natural Resources Dr Waqar Masood told The Express Tribune.
Sources said that the Oil and Gas Regulatory Authority (Ogra) had also supported a resolution passed by the Parliament for switching to monthly mechanism for providing relief to the consumers.
“Earlier, we had also proposed the government to review the oil price on a quarterly basis but the proposal was not considered,” an official of Ogra said, adding that the regulator was already against the proposal of weekly oil pricing mechanism.
The petroleum ministry had not made any recommendations regarding the oil prices review and it was now up to the ECC to decide, said sources. However, the petroleum ministry had also advocated the proposal of weekly oil prices review saying that it had broken the cartels of petroleum dealers who used to hoard stock to fleece consumers. Ministry of Finance had already opposed the weekly review mechanism at a time when summary was tabled before the ECC for approval, but their concerns were not addressed.
In the summary, the petroleum ministry had also attached recommendations of parliamentary bodies on abandoning the weekly review mechanism and reverting to monthly to provide relief to the consumers. The Federal Board of Review (FBR) had pointed out that the national exchequer had lost Rs7 billion due to monthly oil prices review.
Despite the fact that the petroleum ministry had given an undertaking to the Supreme Court on reverting to monthly price revision, the ministry had trickily put the weight on the shoulder of the ECC to take a decision.
Sources said that the two-page summary listed advantages of weekly review mechanism instead of benefits of fortnightly or monthly price determination to the masses. The ECC is asked to take a decision in the absence of a complete summary, they added.
They said that the ECC members were also aware about the directions of the Supreme Court and hoped that the committee will decide in favour of the consumers.
Published in The Express Tribune, November 20th, 2012.
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