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Supreme Court Questions Weekly Review (Fuel Prices)

Posted by on Thursday, October 25, 2012, 10:25
This news item was posted in Business category and has 0 Comments so far .

The civil bureaucracy failed to justify to the Supreme Court the weekly review of petroleum product prices, leading the court to strongly question the government’s energy policy.

Supreme Court

Supreme Court of Pakistan

While hearing the petrol prices case on Wednesday, an apex court bench announced it would pass an order, most probably today (Thursday), regarding a new arrangement of petroleum prices.

The bench also strongly criticised linking prices of gas with prices of petroleum products, calling the move an illegal decision of “able bureaucrats” of the country.

After a day-long debate on the issue, secretaries of relevant ministries, confessed before the court that gas, a domestic product, has nothing to do with petroleum products.

“Don’t insist on theoretic arguments and tell us why common people are being crushed in the name of different charges and fluctuation in the prices of these products,” the bench asked Petroleum Secretary Dr Waqar Masood and the Oil and Gas Regulatory Authority (Ogra) chairman.  “Why is the burden always passed on to the consumers?” Chief Justice Iftikhar Muhammad Chaudhry said.

The bench observed that instead of a “regulatory” body, Ogra had become a “redundant body,” given the new mechanism of reviewing petroleum prices on a weekly basis.

“Unfortunately, the government is now hand in  glove with the Oil Marketing Companies (OMCs),” Justice Jawwad S Khawaja said.

Justice Chaudhry said that there must be a mechanism under which Ogra could implement its policies as a regulator and ensure the interests of the consumers.

Petroleum Secretary Dr Masood told the court that the issue of weekly reviews of prices would be tabled in a meeting of the Economic Coordination Committee.

“Being an expert on the issue, I must say that a weekly review of prices is for the betterment of the consumer,” he said.

The court also pointed out negligence on part of the government, due to which billions of rupees worth of losses were incurred by the national exchequer during the tenure of the illegally appointed Ogra chairman Tauqir Sadiq.

Sadiq is currently a proclaimed offender and is facing a reference for financial misappropriation of Rs80.56 billion in an accountability court of the National Accountability Bureau.

Linking prices of gas with petrol products

Chief Justice Chaudhry observed that while linking the price of imported petrol with the price of the US dollar is understandable, CNG is domestically produced and its linkage with the price of imported petrol is questionable.

Ogra Chairman Saeed Ahmed Khan informed the court that the tariff is determined by Ogra, subsequent to the submission of a tariff petition by the Sui-Northern Gas Pipeline Limited (SNGPL) and the Sui Southern Gas Company Limited (SSGCL) twice a year, in July and January.

In that case, the chief justice observed, the tariff for consumers should also be determined biannually instead of on a weekly basis.

Khan informed the court that gas prices for consumers can be determined biannually, upon which the chief justice questioned how the authority would compensate consumers for the weekly raise in tariffs paid so far.

The court has issued notices to the managing directors of the SNGPL and SSGCL and also sought a report on the formula used for gas pricing from the Ogra chairman.

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