ISLAMABAD: Ordering a forensic investigation into the June 2020 countrywide petroleum shortages, Prime Minister Imran Khan on Friday removed his special assistant on petroleum and the petroleum secretary from their positions to ensure transparency.

In June last year, the country’s petrol stations went dry as international prices went down and oil companies resorted to lower imports to avoid inventory losses amid alleged collusion between some government officials and market players.

Speaking at a news conference, Minister for Planning and Development Asad Umar said the Federal Investigation Agency (FIA) had been asked to complete the forensic investigation within 90 days to establish the criminal acts and collect evidence acceptable to courts for prosecution of those who colluded or benefited from the oil crisis.

“The time has now come for punishments” and the prime minister had made it clear that this “mafia” and other cartels that had been operating for decades under the “leadership of previous rulers” would not be spared, he said. “The institutions have failed to fulfil their responsibility and we have to fix responsibility now, whether they were incapable, had personal interests or colluded”.

Orders forensic probe into last year’s countrywide petroleum shortages

To ensure transparency, the prime minister directed SAPM Nadeem Babar to step down and Petroleum Secretary Asad Haya-ud-din to report to the Establishment Division so that they are not at the helm of affairs to influence the investigation.

Mr Umar, however, made it clear that no illegal action had been seen on part of Mr Babar or Mr Asad, but since losses to the tune of billions of rupees had been caused to the nation and the prime minister did not want those involved to go scot-free, Mr Khan wanted the entire chain involved in the crises investigated and that no doubt should remain about possible involvement of anybody.

Answering a question, the minister said Energy Minister Omar Ayub Khan would continue as he had only policymaking role and had nothing to do with the administrative affairs of the ministry.

Mr Umar said a committee he headed and also consisted of Education Minister Shafqat Mahmood, Human Rights Minister Shireen Mazari and Railways Minister Azam Swati divided recommendations into three parts on the basis of the report of an earlier inquiry commission led by an FIA officer, Abubakar Khudabakhsh.

The first category is of actions which are criminal acts and under the law criminal cases should be registered against those involved. Mr Umar said the evidence had to be gathered in a way that charges could be brought before the court of law for prosecution. The FIA has been told to conduct a forensic audit to start prosecution.

It may be recalled that the 15-member inquiry commission had recommended departmental proceedings against top hierarchy of the petroleum division, dissolution of the Oil and Gas Regulatory Authority (Ogra) and a halt to the operations of refinery and oil marketing company Byco. The commission’s 163-page report estimated over Rs250 billion worth of oil smuggling from Iran and noted that a wide range of operations in the oil sector were against law and rules, operating in vacuum and without any check and balance and for imposing minimal fines on nine delinquent oil companies.

Mr Umar told the presser that the ministerial committee constituted by the prime minister had submitted recommendations to the premier who already had some additional information. “When the additional information came to the fore, the prime minister gave us a go ahead to make public recommendations of the ministerial committee,” he said.

The FIA has been tasked with investigating whether legal requirement for a minimum inventory of petroleum products was fulfilled by the oil marketing companies (OMCs). The discrepancies in actual sales and those reported by the OMCs will also be investigated by the FIA which will establish as to who reported these sales and inventories and who hoarded the products and who was responsible or colluded.

“These are all those things which are noted in the inquiry commission’s report and prima facie, it was determined that these did occur,” he said.

Mr Umar said there were a lot of deficiencies in the system and conflict in the understanding of regulatory and administrative roles of the Petroleum Division and the regulator — Ogra. He said there were many legal violations and issues involved and apparently undue advantage had been derived from temporary marketing licences, illegal hospitality agreements for product storage and marketing.

He said it was unfair that those involved in such criminal acts worth billions of rupees got away with fines and the prime minister wanted to ensure that they were handcuffed and put behind bars.

He said the inquiry commission had also highlighted allegations regarding delayed berthing of an oil ship so that when new rates were notified, the product could be sold at a higher rate.

He said while oil companies and fuel stations would be probed in the forensic audit, it would also be investigated who were the government officials facilitating such criminal acts and whether that was because of collusion, incapability or lethargy. The Petroleum Division, Ogra, Ministry of Maritime Affairs and the port authority will be investigated for all illegal acts.

According to Mr Umar, the second part of the recommendations pertains to administrative action against some people sitting in administrative roles, if they are not skilled or capable enough or they have no relevant background to sit in these positions. The Petroleum Division has been asked to look into this matter and report to the prime minister as soon as possible.

The third part relates to revisiting the existing laws governing the petroleum sector. Mr Umar said the system under which the petroleum sector operated had two key players – the Petroleum Division and Ogra – which passed responsibility on each other citing different clauses of the law. Therefore, a new law will be enacted to remove the ambiguity as to what was the responsibility of the regulator and the Petroleum Division. He said whenever issues were brought up before the cabinet committee, the lack of clarity of the roles of the two players in the sector was always a matter of debate.

He said the law was also found to be very weak in punitive actions. “So the law will be revisited and the punishments will be made proportionate to the cost of the crime committed.”

He said the ministerial committee had also made recommendations for overall improvement in petroleum sector that would be sent to the Petroleum Division so that it may devise an action plan. The plan will be shared with the Cabinet Committee on Energy and then with the Cabinet for approval.

Published in Dawn, March 27th, 2021