close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
 
March 27, 2021

Petroleum Ministry’s wrong decisions caused loss of billions

 
March 27, 2021

ISLAMABAD: The Petroleum Ministry’s wrong decisions caused loss of billions of dollars to the national kitty, which was repeatedly pointed out in Geo News programme ‘Aaj Shahzeb Khanzada Kay Saath’.

The country bore the brunt of these wrong decisions financially. First of all, instead of buying cheaper petrol, a ban was imposed on import of petroleum products.

This was followed by a massive gas crisis in the past winter, but the ministry again took delayed and wrong decisions that led misery to the entire nation, besides the massive financial losses. The decision of importing LNG at spot rates caused Rs50 billion loss alone.

The government had decided to probe the gas crisis of last year and FIA was given 90 days for forensic investigation. The SAPM on Petroleum Nadeem Babar along with secretary petroleum have been removed from their positions.

The petrol crisis probe by the FIA revealed that the Petroleum Ministry and DG Oil failed to ensure that the oil marketing companies (OMCs) lift the existing stock from February to April. The OMCs refused to take the quota from local refineries. The Petroleum Ministry and OGRA did not take any action over the violation by OMCs. On March 25, 2020 the Petroleum Ministry through a controversial move asked the OMCs to cancel their import orders. The report said the ban was imposed at a time when oil prices were at the lowest in history. It said the issue could have been solved by increasing the import quota of OMCs.

The report said the ministry put the whole burden of negligence by OMC on the state-owned PSO and it was pressured to import oil on higher price and then sell it at lower price, causing a loss of about 7-8 billion rupees. Private companies that imported oil, hoarded it and then started increasing prices benefited massively while, the government and the end consumers were at the losing end both the times. The report also mentioned that the ministry failed to build strategic storage and could not benefit Pakistan from the dramatic fall in the global oil prices.

The commission recommended legal action against DG Oil and raised questions on the role of secretary petroleum as he failed to satisfy the cabinet over the import ban. The commission also recommended recovery from oil companies which earned profit illegally.

It was told in ‘Aaj Shahzeb Khanzada’ programme that Pakistan failed to take benefit from the abundant supply of oil during March-April last year and instead of providing cheaper oil to consumers, the country faced petrol crisis in June 2020. At that time, Nadeem Babar had said the Ministry of Maritime Affairs has been asked to establish a floating storage for petroleum. He had also showed intention of storing petrol for coming months. The Minister for Maritime Affairs Ali Zaidi, when contacted, said that he was not told by Nadeem Babar, but he himself took the proposal to the cabinet as the oil was very cheap at that time. But the Petroleum Minister rejected it while terming it a costly proposal.

The Geo News programme raised the issue again and again, saying that delayed decisions are costing Pakistan heavily, but the Petroleum Ministry was unwilling to listen. Even personal attacks were made on the programme host and then the inevitable happened. i.e. Pakistan bought LNG for December in November at double the rate. Due to delayed decisions, Pakistan faced loss of Rs50 billion in winter due to which neither the industry nor the public could get gas in winter. Expensive electricity was produced from furnace oil and the burden was ultimately shifted to consumers. Nepra in a report said that in January only, Rs12.9 billion more were spent on power production from furnace oil and HSD. Now when the prime minister has taken an important step of ordering inquiry into the petrol crisis, a probe into the LNG crisis is also required.