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Thursday December 02, 2021

Inquiry Commission on petrol shortage: Action against secy Petroleum Div, DG Oil, OMCs recommended

December 15, 2020

ISLAMABAD: The five-member Inquiry Commission headed by Abubakar Khudabaksh, Additional DG FIA, to probe into the shortage of petroleum products that hit the country in June, 2020 has recommended strict action against secretary Petroleum Division, DG Oil, Ogra and private oil marketing companies (OMCs).

The commission’s report also asked for dissolution of Oil and Gas Regulatory Authority (Ogra) for six months through act of Parliament, arguing it is not aligned with the ground realities. The Government of Pakistan constituted it on July 28, 2020 to probe into the shortage of petroleum products.

The 155-page report submitted to the federal cabinet that meets today (Tuesday) , mentions the catalogue of failures of Ogra since 2002 that includes dishing out licenses to OMCs without ensuring actual enhancement of storage facilities, failure to ensure minimum stock requirements, imposition of ritual fines on OMCs for drying out their retail outlets during June 2020, issuance of unlawful provisional marketing licenses to OMCs, no punitive action on illegal joint ventures or hospitalities between OMCs, no mechanism to ensure lifting of local quota of petroleum products by OMCs, no checks on operations of unlawful private storage companies.The oil industry would have been better-off had there been no Ogra. "Such proliferation of licenses has upped the scale of malpractices including smuggling and adulteration.” The Inquiry Commission strongly recommended dissolution of Ogra through an act of parliament within next six months.

It recommends strict penal or departmental action against those involved in illegalities. especially in issuance of unlawful provisional marketing licenses/marketing permissions. This includes the chairpersons (incumbent and the previous ones) and their associated members (Oil, Gas, Finance). To accurately assess the illegality on part of each person is a matter of further investigation.

It also mentions saying that the Ministry of Energy, Petroleum Division (MoEPD), is also rife with apathy, incompetence flavored with malpractices, and disregard to laws/rules. However, the commission recommends that to get out of the utter confusion, MoEPD must be empowered under act of parliament. The dire straits of oil industry can only be straightened by a unified authority.

The commission strongly recommends departmental/penal action against the incumbent DG Oil for passing flagrantly illegal orders for allocation of import/local quotas. Strong departmental/penal action is also recommended against Imran Ali Abro and the other associates maneuvering the unlawful affairs in the Petroleum Division. Abro is reportedly the kingpin in the Petroleum Division and calls the shots on behalf of his superiors. It also mentions that that the gentleman also signed of the so-called import ban letter (25 March, 20). He is serving in MoEPD for the last six years without any legal ground. Under the Rules of Business, a contract employee of private company (Inter State Gas Systems (Pvt. Ltd) under MoEPD cannot serve on deputation/attachment. All such 'stand-out-bad-characters' must not go unpunished.

The report also points the fingers towards the role of secretary MoEPD which cannot be ignored. "Apparently, he remained encapsulated in a vacuum. both prior to and during the crisis period. No explanation was offered as to why the ‘word rationalization’ approved by cabinet was transformed into ban or cancellation of imports.”

Likewise, how would the flagrant violations of OMCs spread over a prolonged period could be ignored by him? The commission also recommends departmental reprimand/action against the Secretary Ministry of Energy, Petroleum Division. The commission also recommends strict action against officials of Department of Explosives (working under MoEPD found involved in issuance of unlawful Forms 'Kt & 'L' to retail outlets and storage depots respectively. “Monetary losses forced upon PSO, a state-entity, during the days of shortage, must be equitably recovered from the OMCs which creamed off the unlawful profits through hoarding, slowing down or drying out their retail outlets. How can the cruel story of oil ship 'Ploutus' go unpunished where the PSO ship was forced to discharge earlier by MoEPD by violating the priority-queue to delay the berthing of 'Ploutus'.”

The commission recommends that a monitoring cell must be established in the MoEPD to should collect all relevant data from OMCs (import, local uplifting, daily/monthly sales of OMCs, refinery import/production program, berthing, IFEM claims and PRMs, etc). This cell would record data of every aspect of OMCs just like OCAC which must be scrapped. Only this data would have legal sanctity and the OMCs could also be held accountable in case of spurious figures. The cell would be directly available to the MoEPD and the GOP whenever required.

The report also recommends closure of all illegal retail outlets while simultaneously initiating action against their owners and patrons.

The commission recommends that in the future, Product Review Meetings, should only fix quotas of local refineries as per the market shares of OMCs. The OMCs should only give their import plans and MoEPD should be content with minimum stock of 20 days by each OMC.