The Inquiry Commission, formed in July this year to investigate the sudden shortage of gasoline in the country, noted that one of the reasons for the crisis was the lack of coordination between the departments operating within the oil division. This is stated in the report of the commission, Additional DG FIA. The Commission submitted its report to Prime Minister Imran Khan, who asked relevant officials to present it to the Federal Cabinet at a meeting on Tuesday.
AS per the report, Oil marketing companies (OMCs) are primarily responsible for the fuel shortage hitting the country in early June-2020, as they deliberately cut off the supply of petroleum products to the pumps despite having large inventories at their disposal.
The report said that OMC companies made between Rs 6 and 8 billion in profits during the oil crisis in June by doing all the illegal activities in the usual way. It further added that the crisis period from June 1 to 26 needs to be specifically discussed in order to see how OMC companies perform during this time.
“On May 31, gasoline prices were sharply reduced and the new price was set at Rs 74.52 per liter [in light of lower oil prices on the international market]. Since OMC would have suffered significant inventory losses due to the free sale in June, they have taken the easy route to slow shipments or simply dry up, contrary to all legal and ethical standards.
“As a result, petrol shortages started across Pakistan and gas stations gradually dried up, making it impossible for the public at large to take advantage of this massive price cut.”
“All OMCs [with the exception of the Pakistan State Oil (PSO) and Shell] have relatively held their shares though knowing the the expected price increase. This was demonstrated during ground inspections of gas stations and reports provided by OMC with affidavits, ”the statement said.
During this crisis period, OMC showed paper sales, she said, but ground inspections of gas stations in the Punjab made it clear that OMC were running out of stock.
“It is clear that all OMCs had a pretty good idea of a price increase of at least Rs 20 per liter and thus illegally accumulated them during the crisis, thereby depriving the public as a whole of billions of rupees.”
Likewise, Shell has tried to keep pace with the situation to some extent and has done better than other Oil companies. Shell also posted a loss of over Rs 8 billion in the first two quarters of 2020. ”
The report said that the oil ministry was also unable to ensure that fuel supplies would not be interrupted, while government agencies operating under the control of the oil department were unable to verify the stock of oil sales companies.
“During the crisis, the Oil and Gas Regulatory Authority (UGRA) remained a regulatory body as indifferent to the situation as a non-functional structure.
Moreover, nine companies paid pennies of 25 million rupees – 45% of the total amount imposed – and were subject to a review of the fines, she added.
The report indicates that Dr. Shafi Rahman Afridi, a veterinarian by training, has been appointed as DG Oil . He indicated that Dr. Afridi had not previously worked in the oil sector.
“The appointment of the incumbent President as well as the previous DG Oil was also found to be contrary to the approved standards/regulations. The current DG Oil, Dr. Shafi Rehman Afridi, is a 20th-grade employee in the Office Management Group (OMG) and has no previous experience as CEO of Oil.
“This fact reflects a flagrant violation by the Ministry of Economic and Social Development and a lack of serious attention to the issues and work of the DG Oil Office, which plays a key role in the oil / oil industry in Pakistan.”
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