LAHORE: The Federal Investigation Agency (FIA) on Saturday arrested five people, including top officials of the Oil and Gas Regulatory Authority (Ogra) and the petroleum ministry, in connection with a 2020 petroleum scandal.

“Ogra’s former members gas and oil, Amir Nasim and Abdullah Malik, former ministry of energy director general, Shafiullah Afridi, former assistant director (oil) Imran Abro, and Fossil Energy Chief Executive Officer Nadim Butt have been arrested after registration of first information reports (FIRs) against them for their alleged role in the 2020 petroleum scam,” an FIA official told Dawn on Saturday.

He said the suspects were produced in court and the FIA obtained their four-day physical remand. Furthermore, raids were being conducted to arrest the directors of another oil marketing company, Askar Oil Services Pvt Ltd.

The FIA Lahore had registered the FIRs on Friday after completing an investigation into the scam against several officials of Ogra, energy ministry and petroleum division, and two oil marketing companies (OMCs) — Fossil Energy and Askar Oil Services — under Sections 420, 468, 471, 109 of PPC r/w section 5(2)47 of PCA and a section of AMLA 2010.

Suspects issued illegal petroleum licences and allotted illegal import quota

According to the FIA, the Ogra officials nominated in the FIRs have been accused of issuing illegal petroleum licences and the ministry officials of allotting illegal petroleum import quota. “On the other hand, the OMCs in question in connivance with the Ogra officials set up illegal filling stations across the country,” it said.

According to one FIR, “the accused oil marking company — Askar Oil Services Pvt Ltd -- failed to deliver its avowed commitment submitted in 2005. In criminal complicity between the said OMC and Ogra, all the graft sales by the accused OMC originate from illegal extensions granted by Uzma Adil Khan (chairperson), Noorul Haq (member finance), Amir Naseem (member gas) and Dr Abdullah Malik (member oil) and their predecessors. Furthermore, the OMC illegally established a massive network of retail outlets in flagrant violation of legal requirement to develop a 20 days storage facility proportionate to the volume of sales. As per the record provided by the accused OMC, it has 390 retail outlets which itself conflicts with the figures submitted by the department of explosives numbering its operational retail outlets at 1,019. This mere fact is criminal concealment on the part of the accused OMC. Continued illegal operations by the said OMC were never possible without the collusion of the officials of Ogra which could have easily halted the marketing of the said OMC by revoking its licence.”

The report further said that in clear violation of the licensing conditions, the accused OMC could only maintain stocks having a cover of four days against the mandatory requirement of 20-day cover in June 2020 when the country was facing a petroleum crisis.

“Even during the period from Jan-June 2020 the OMC never maintained the requisite minimum stock in collusion with officials of Ogra, which is a necessary requirement as per licence conditions issued by it.”

The FIA said the daily stock position of M/s Askar was also checked and it showed they had a substantial stock of almost 20 million litres of petrol at the start of June 2020. “According to data, Askar shows a dip in stock by 6.8 million litres in June 2020 of which exists no evidence of product exchange. Furthermore, Askar had 6.5 million litres of petrol in stock at the end of the month which they chose to hoard and did not supply to their outlets. In case of high speed diesel the total stock in hand and intake from refineries amounted to almost 18 million litres while their supply was only 0.82 million litres while the rest was hoarded. The illegal benefit of this amounts to Rs693,000,000. In addition, the supply shown is fudged, as according to retail outlets, the owners of petrol pumps gave statements that they have received no or very little supply. Askar showed a supply of 781,368 litres to these petrol pumps while they have given an affidavit of receiving only 46,987 litres in total. Resultantly, the actual quantum of illegal benefit is far more than the above amount and will be ascertained during investigation.”

These illegalities, it maintained, explicitly reflected the “abuse/misuse of official position by the concerned public servants of Ogra along with the OMC in question (the beneficiary in obtaining unlawful gain as abettor)”.

“The crime proceeds obtained are being used in money laundering,” the agency said.

The other FIR states: “In a clear disregard to the terms of the provisional licence, M/s Fossil Energy Pvt Ltd failed to deliver on its plan to complete its infrastructure. Instead of taking note of this failure, Ogra officials in question by abusing their official position as public functionary in connivance with M/s Fossil Energy (OMC) acted otherwise and illegally granted permission for marketing of petroleum products to it in September 2019.”

It further says no sale record was provided to Ogra, the OMC dumped and sold more than 25.023MT of refined petroleum product on retail outlets belonging to other OMCs or operating illegally. “These facts manifestly demonstrate that M/s Fossils Energy Pvt Ltd committed these flagrant illegalities in collusion and collaboration with the concerned officers/officials of the ministry of energy and petroleum which resulted in unlawful gains by the OMC and deprived the rightful OMCs.”

Published in Dawn, October 31st, 2021