Monitoring Report
ISLAMABAD:
Federal Investigation Agency (FIA) will fix the main culprits of oil marketing companies (OMCs) involved in the oil crisis 2020.
According to sources, FIA has informed Cabinet Committee on Energy (CCoE) on Thursday that it would complete the inquiry in September this year. However, the cabinet body had expressed serious concerns over a delay in completing the report.
Earlier, OMCs had made billions during the oil crisis of June 2020 whereas PSO had to sustain billions of rupees loss. And, Prime Minister Imran Khan had given a deadline to complete an inquiry on the oil crisis to fix responsibility on those involved in it. Oil Inquiry Commission had pointed out companies involved in the crisis in Pakistan in 2020. However, the inquiry is facing a delay.
Prime Minister Imran Khan had removed Nadeem Babar special assistant on petroleum and secretary petroleum to ensure transparency in an investigation by FIA.
On the other hand, oil companies say that this sector is the most important one to keep the wheels of the economy turning.
They had already provided information in wake of ongoing scrutiny it is facing that is consuming thousands of man-hours in providing information to the FIA, Explosives Department.
Oil companies operating in Pakistan had already provided the information to these agencies last year during the FIA Inquiry as well as the LHC Public Interest Litigation.
OMCs say that not only has this impacted the work of our Regulators, namely the Ministry of Energy – Petroleum Division and the Oil & Gas Regulatory Authority (OGRA), it is also sending an awfully wrong signal to the existing and potential future investors planning to enter the Oil Sector!
Oil companies in Pakistan have also appealed to stop the spate of inquiries by FIA.
We all should stop looking over our shoulders and concentrate on making EASE-OF-DOING-BUSINESS a reality and the continued provision of Petroleum Oil Liquids (POL) to the Pakistani consumer, OMCs say adding especially to our Armed Forces so valiantly guarding our borders! EASE-OF-DOING-BUSINESS is the hallmark of the present Government also and mandated by the Honorable Prime Minister of Pakistan himself!
OMC Margins are the only source of recovering their costs in a regulated market.
Since ‘2014, in accordance with an ECC decision, the government had linked margins to the Consumer Price Index (CPI) published by the Pakistan Bureau of Statistics. OMC Margin increase is due on an annual basis every July.
However, the OMC Margins increase continues to face delays.
The latest increase on April 1, 2021, of Rs. 2.97 per liter was Rs. 0.12 per liter less than the actual CPI increase and has caused a loss of Rs. 7 Billion to the OMCs.
They have requested the government to adjust loss that has seriously set us back financially.
OMCs have also requested to adjust earliest to coincide with actual CPI increase instead of waiting for a Study by the Pakistan Institute of Development Economics (PIDE). The study is was due in October 2019 but is currently facing further delays.
