ISLAMABAD, July 11 The Supreme Court bench that will take up the Rana Bhagwandas Judicial Commission Report on oil pricing may also look into the virtual absence of a senior petroleum ministry official from the fortnightly meetings of the Oil Companies Advisory Committee (OCAC) that used to determine oil prices. The job is now being done by Ogra.

In its report submitted to the Supreme Court, the commission highlighted that the Director General (Oil) or his nominee from the Ministry of Petroleum and Natural Resources attended only three meetings out of a total of 114 held every fortnightly from July 2001 to April 2006.

“There appears a tacit understanding with the government of the day which left everything to the sweet will of the oil companies by overlooking loot and plunder in fixing oil prices,” counsel Muhammad Akram Sheikh commented while talking to Dawn.

The counsel, who has submitted a brief note on the 74-page Rana Bhagwandas Commission report on oil and gas pricing mechanism in compliance with the Supreme Court directions, is also representing senior journalist Iftikhar Ahmed before the court.

According to the commission's report, the DG (Oil) was supposed to manage, ensure and monitor the demand and supply of petroleum products throughout the country.

During the period when price fixation function was assigned to OCAC, the petroleum ministry was obliged to monitor and regulate the functioning of OCAC in a vigilant and proactive manner but perhaps for want of sufficient capacity and technical know-how, it used to faithfully accept and notify whatever calculations were done by OCAC, the commission deplored.

The OCAC was established in December 1999 when Gen Pervez Musharraf, as the then Chief Executive, announced deregulation policy by introducing a formula called “rationalised import parity policy” on petroleum products. Accordingly, a summary was initiated by the Petroleum Ministry advising the chief executive to grant function of determination and notifying various oil products to OCAC.

Subsequently, an amendment to the ordinance was promulgated on June 29, 2001, to establish OCAC. However, the commission said the amendment was patently illegal and unconstitutional since members of the OCAC were direct beneficiaries of oil business and, therefore, could not be expected to perform their functions in isolation of their self-interest.

“It would be highly inconceivable to expect that persons having direct interest in the outcome of an exercise would be oblivious of their personal interest and act freely and independently in the larger consumer interest,” the report said, adding it was for this reason that former Attorney General Makhdoom Ali Khan had advised the petroleum ministry to abolish this practice as it was difficult for him to defend the federal government before the Supreme Court.

Even otherwise the spirit of deregulation policy was to authorise OCAC till the formation of a permanent regulatory authority, which was later established on March 28, 2002, when Ogra Ordinance 2002 was promulgated and enforced. But functions performed by OCAC were not handed over to this statutory regulatory authority. Rather it was only after drawbacks in the implementation of the policy and legal infirmity on part of the federal government were exposed that this business was transferred to Ogra in April 1, 2006.

Meanwhile, Shahid Orakzai has moved a petition before the Supreme Court, questioning how could the president amend the finance bill through an ordinance. He pleaded before the Supreme Court to suspend the operation of the ordinance for 10 days to allow the National Assembly to amend the finance bill under which the carbon surcharge on petroleum products was levied but later withdrawn on the directions of the Supreme Court.