Petroleum Ministry’s wrong decisions caused loss of billions

ISLAMABAD: It was pointed out repeatedly in Geo News programme ‘Aaj Shahzeb Khanzada Kay Saath’ that the Petroleum Ministry was continuously taking wrong decisions. The country bore the brunt of these wrong decisions in shape of loss of billions of rupees. First of all, instead of buying cheaper petrol, a ban was imposed on import of petroleum products. And then came the gas crisis in winter, and the ministry again made delayed a wrong decisions which again caused massive losses. Only the delayed decision of LNG import caused Rs50 billion loss.

The government has decided to probe the gas crisis of last year and FIA has been given 90 days for forensic investigation. 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 this 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 sale it on lower price, causing it about 7-8 billion rupees loss. Private companies were benefited which started oil import, hoarded it and then started increasing prices. The government and the end consumers were at the losing end both times. The report also mentioned that the ministry failed to build strategic storage and could not benefit Pakistan from dramatic fall in 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 ban on import. 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.

Minister for Maritime Affairs Ali Zaidi, when contacted, told that he was not told by Nadeem Babar, but he himself took the proposal to cabinet as 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 on double rate. Due to delayed decisions in this regard, Pakistan faced loss of Rs50 billion only in winter. So neither the public, not industry could get gas in winter. Expensive electricity was produced from furnace oil and the burden was ultimately shifted to consumers.

Nepra said in a report that only in January, Rs12.9 billion more were spending on power production from furnace oil and HSD.

Now when the prime minister has taken an important step of inquiry on petrol crisis, a probe into LNG crisis is also needed.