ISLAMABAD: The government has decided in principle to set up a commission to probe the recent shortage of petroleum products, shift oil pricing to quarterly basis and change the pricing mechanism for imported Euro-V petrol and diesel to Platt’s Oilgram instead of PSO imports.

A final approval is likely to be granted by the federal cabinet at a meeting on Tuesday. The meeting has a heavy agenda, including a proposal for regularisation of the Naval Sailing Club on Rawal Dam, Islamabad.

The meeting will take up 13 issues, including recruitment regulations for the post of chairman and Members of Wapda and an examination of outstanding media dues.

The cabinet will also take up a presentation of key economic indicators by the Planning Commission and a progress report on institutional reforms by the Adviser to PM on institutional reforms and austerity, Dr Ishrat Hussain.

Cabinet to discuss the issue today

Informed sources said that on the prime minister’s instructions, the Cabinet Division is taking up a summary for constitution of a Commission of Inquiry (COI) under the Pakistan Commission of Inquiry Act of 2017 to probe the recent shortage of petroleum products and fix responsibility.

The COI, said these sources, will comprise almost all the investigation, intelligence and regulatory agencies for forensic audit of the record, stock position, supplies and sales of the petroleum products of the entire supply chain.

The sources said a series of inquiry committees had been constituted to investigate the causes of shortage, but most of them did not come up to the expectations of the prime ministers, either because of conflict of interest, lack of evidence, non-cooperation of the stakeholders or challenges faced before the courts.

It had now been decided to constitute the COI to give it all the legal powers as had been done in the recent cases of sugar and wheat prices.

The cabinet will also approve terms of reference for the commission, which will comprise senior representatives of the National Accountability Bureau, Federal Investigation Agency, Intelligence Bureau, Inter Services Intelligence, State Bank of Pakistan, Securities & Exchange Commission of Pakistan, Oil & Gas Regulatory Authority, Competition Commission of Pakistan, Hydrocarbon Development Institute of Pakistan and the Federal Board of Revenue.

The commission will have the powers to hire the services of market experts to review the decision-making of the monthly and quarterly product review meetings, import orders and changes and stocks at various locations of the supply chain.

In a related move, the petroleum division has moved a summary reportedly for certain delays on import of Euro-V (10ppm) diesel and petrol because of some difficulties, including an estimated increase in prices.

Amid protest and resistance by the oil industry, the government had earlier this month ordered a ban on import of petrol and diesel of less than Euro-V standard with effect from Aug 1 and January respectively.

This was done following decisions of the Cabinet Committee on Energy (CCOE).

The CCOE had approved its pricing based on PSO’s import costs and continuation of monthly price adjustment. The petroleum ministry has now moved the summary for oil pricing on quarterly basis and based on average Gulf-Mean Price quoted in Platt’s Oilgram.

The oil industry has expressed its inability to abide by these instructions at such a short notice and warned of a Rs7-8 per litre price hike and $200 million annual foreign exchange loss.

It said the country’s motor vehicle fleet was also not ready for such a steep switchover. The element of price hike has been brought to the notice of the cabinet under the summary.

Under the new specifications, no product should contain more than 10ppm (particles per million) of sulphur from the existing level of 50ppm. The government decision, although taken at the highest level, contains a major dichotomy given that local refineries cannot produce products of such standards and parts of the country would continue using existing standards.

It will remain a challenge for consumers in many areas whether they were paying the price for actual product of a high quality or not.

Wapda recruitment

The cabinet will consider recruitment regulations for the posts of chairman and Members of Wapda. This would be in line with decisions taken by the Council of Common Interests (CCI) on Dec 23 last year to change the management structure of Water & Power Development Authority (Wapda) so that the position of Wapda chairman is rotated among the provinces.

The executive powers would shift to the Chief Executive Officer of Wapda, a professional to be appointed by the federal government, along with professional staff support in line with corporate governance structure.

The cabinet will take up a summary of the interior division for regularisation of the Navy Sailing Club at Rawal Dam. The Islamabad High Court had ordered its sealing last week.

The court had held that occupation of the land and construction of buildings of the sailing club were apparently illegal and in violation of the enforced laws and should be placed before the cabinet for a decision.

The cabinet meeting is expected to take up renewal of regular public transport, aerial work and chartered licences of Pakistan International Airlines Corporation for next year.

Published in Dawn, July 28th, 2020