ISLAMABAD, JUL 1 – The Pakistan Industrial and Traders Association Front has appreciated the Oil and Gas Regulatory Authority for taking action against companies responsible for fuel scarcity, urging it to also take notice of the record jump in oil prices, which were announced out of schedule, neither adopting any legal process nor prompted by any summary moved by the regulator.
PIAF Chairman Mian Nauman Kabir, in a joint statement with senior vice chairman Nasir Hameed and vice chairman Javed Siddiqi, welcomed the move by the oil regulator, imposing Rs5 million penalty each on three oil marketing companies (OMCs) after they were found involved in creating artificial shortage of petrol in the country by hoarding the commodity.
Mian Nauman Kabir observed that the fuel shortage, especially of gasoline, had caused serious difficulties to businesses as well as citizens for almost the whole month across Pakistan, as long queues of motor riders at fuel stations were also seen to fill their vehicles’ tanks. The fuel shortage started because of the short supply to the fuel stations by the private oil companies after the central government reduced fuel prices in the start of this month.
PIAF chairman said that majority of the fuel stations across the country have been closed by the owners, while the fuel stations, which had the stock increased the prices of the commodity by more than 100 percent.
PIAF senior vice chairman Nasir Hameed said that smooth and uninterrupted supply of furnace oil to the industry is of paramount importance as the industry is heavily dependent on it not only for captive power plants but also for running steam boilers.
He complained that the entire cost of fuel was paid in advance to the oil marketing companies but they had halted the supplies for no obvious reason. The industry continued to demand dispatch of oil shipments by oil companies to the industry for which payments had already been made in advance, he said.
Vice chairman Javed Siddiqi appreciated the Oil and Gas Regulatory Authority for issuing first show-cause notices to oil marketing companies seeking explanations and reasons for the petrol shortage at the fuel stations. It is also good news that the Competition Commission of Pakistan had initiated an inquiry into the issue saying that the sudden shortage of fuel across the country at a time when the government reduced prices and low demand due to the COVID-19 pandemic raised suspicion that artificial shortage might have been created, he added.
According to reports, the OGRA imposed penalty of Rs5 million each on BYCO, ASKAR and BE Energy on show cause notices issued during oil shortage crises earlier this month. The preliminary investigation report of the Petroleum Division, and the physical inspection of the OGRA in collaboration with the HDIP, indicated that the three OMCs were involved in hoarding of petrol in first 10 days (June 1st to June 10th).
PIAF leadership said the business community was already facing severe problems due to destruction of Covid-19 and in such a situation making hike of up to 66 percent in prices of petroleum products in one go is unjustified. They said that the price of crude oil in the world market is still around $42 per barrel and as per calculations the ex-refinery price of patrol is worked out at around Rs45 per litre but the government increased the rate of petrol to more than Rs.100 per liter, without any recommendation of the OGRA. They said that as a regulator, it is responsibility of the OGRA to take notice of this anomaly, recommending the reversal of the unprecedented jump in fuel rates.