SC questions govt’s role in oil, gas rates after devolution
ISLAMABAD: The Supreme Court expressed surprise on Thursday over management of the prices of gas and petroleum products by the federal government and said that after devolution of powers under the 18th Amendment the only forum left to decide about such matters was the Council of Common Interests (CCI).
A bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Jawwad S. Khawaja and Justice Khilji Arif Hussain was hearing a case about weekly price adjustment of compressed natural gas (CNG) and against the appointment of former chairman of the Oil and Gas Regulatory Authority (Ogra), Tauqir Sadiq.
The court had summoned Petroleum Secretary Waqar Masood and Ogra Chairman Saeed Ahmed Khan to explain the wisdom behind increasing the prices of CNG, a domestic commodity.
The court expressed shock over the weekly adjustment of gas prices after a decision of the cabinet’s Economic Coordination Committee (ECC) whereas such decisions should be referred to the CCI so that the interests of all the provinces were served.
Besides, agreements with supplier companies were always made for a specific period and not on a weekly basis, the court said, asking why the consumers were forced to suffer.
Justice Khawaja cited Article 3 that provided security from all kinds of exploitation, wondering why the users of CNG were filling the coffers of the government as well as the filling stations’ owners when, being a domestic product, its prices should be low.
The judge also lamented that the Balochistan government was not realising that after the 18th Amendment issues relating to natural resources had been devolved to the provinces.
“It is shocking to learn that Ogra is safeguarding the interests of the companies instead of the consumers,” the court observed.
The petroleum secretary said the ECC had devised a formula allowing Ogra to determine downstream prices of CNG at 65 per cent of the rates of the petroleum products because it was a transport fuel whose wider use was no more advisable.
“In the absence of further exploration and expansion of resources, the government has been forced to introduce rationing in the CNG sector,” he explained.
He said the CNG prices had been closely monitored by Ogra, which had even started auditing the accounts of stations.
NATURAL GAS: Referring to the prices of domestic natural gas, the secretary said the government was providing a subsidy of Rs46 billion to consumers by supplying the essential commodity at Rs390 per million cubic feet.
The country was also facing a deficiency of petroleum products and had to import almost 80 per cent of the total consumption from Kuwait, the court was informed.
The court ordered the secretary to submit a breakdown of the prices of CNG and liquefied petroleum gas. Copies of agreements between the supply companies and the government were also sought.
The secretary will also explain linkages between the prices of CNG and petroleum products as well as the ECC decision allowing Ogra to increase CNG prices on a weekly basis.
The court asked the Sindh and the Lahore High Courts to decide cases relating to freezing of the recovery of the loss under the head of unaccounted-for gas (UFG) from consumers at seven per cent instead of five per cent for the past two years.
“We have noted with concern that the supply companies (SNGPL and SSGCL) have obtained stay orders from the high courts to the effect that the UFG compensation will continue to be charged at seven per cent,” it observed.
It said the matters related to revenue should have been decided without delay.
The Supreme Court registrar was ordered to communicate to the chief justices of the high courts the directive for early decision of the matter in the interest of justice, preferably within two weeks.
The court was informed that a corruption reference against the former Ogra chief would be filed on Thursday for causing a loss of Rs83 billion to the national exchequer.
The National Accountability Bureau was asked to submit a list of people languishing in jails for years without references having been filed against them and the number of cases in the accountability courts. The case will be taken up again on Oct 24.