Petroleum prices: SC assigns private firm to audit PSO''s import, selling process

The Supreme Court on Saturday nominated a private audit firm to review the pricing structure of petroleum imported and sold by Pakistan State Oil (PSO). Prosecutor General National Accountability Bureau (NAB) Asghar Haider was directed to look into appointments where the top brass in the government organizations is getting salary over Rs 1.5 million. Chief Justice Mian Saqib Nisar, heading a three-judge bench directed to the PG NAB to submit the report in this regard within six weeks.
The bench, hearing a suo moto case regarding the oil prices, granted five weeks time to the head of private firm KPMG Bhakhtiar Kazmi for the completion of audit and submitting its report. The firm will charge Rs 4.3 million for the audit of PSO, which the court approved.
All the government departments, bodies and the PSO were ordered to assist the KPMG and provide all necessary record and documents required by the firm. Attorney General for Pakistan Khalid Jawed was made focal person for liaison with the government and the firm.
The bench said the person [Sheikh Imranul Haque] who was appointed Managing Director PSO for three years in 2015 was given Rs 3.7 million per month for three years contract. The court noted that he was paid high salary at a time when the petroleum products were supplied to the people at high rate. He [Imran] was given Rs 3.7 million per month not in a transparent and honest manner and this seems to be the result of nepotism.
The court noted that not only in PSO but in other organizations upper hierarchy is getting higher salary more than Rs 1 million [per month].
Auditor General for Pakistan (AGP) Javed Jehangir stated that there is no harm in audit of PSO and OGRA. The AGP is the relevant forum which points out financial irregularities in the government departments. "I said there should be audit of PSO and OGRA," Javed Jehangir told the CJP.
"We want to give due importance to the Auditor General of Pakistan but as this is special audit therefore ''let it be done by KPMG,''" said Justice Saqib Nisar. He directed the AGP to provide the assistance and cooperate with the private audit firm.
At the onset of the hearing, the Chief Justice inquired from Imranul Haq on whose recommendations he was appointed. Haq replied that the then Prime Minister Nawaz Sharif in 2015 had approved his appointment. "The committee had selected me from the six candidates," he said, adding the appointment was finalized by the then government.
The Chief Justice remarked that Haq had no prior experience in petroleum sector; therefore, NAB should be asked to investigate his appointment. He further stated that audit of PSO should be done.
The Chief Justice termed it a joke with the country as tax money is being wasted, saying: "How can a grade-22 employee drawing between Rs 0.2-0.25 million be appointed as the MD on a salary of Rs 4 million?" Imranul Haq said when he took charge of the PSO, its profit was Rs 6 billion. "I drove the company''s profit up to Rs 18 billion," he added.
However, the Chief Justice after hearing the MD PSO adjourned the case till 1.30pm. When the hearing resumed at 02:00pm, the attorney general informed that ToRs for the audit of oil import by PSO have been prepared.
The ToRs include: "To review the pricing structure for motor oil, high speed diesel and furnace oil sold by PSO and identify the cost components, including the related basis and assumptions used for each cost component and the appropriateness therefore. Review the underlying process for import of motor oil, high speed diesel, and furnace oil by PSO including the related procedures at public stakeholder offices, including Petroleum Division, OGRA, State Bank of Pakistan. Identify controllable and uncontrollable factors and comment on the transparency of the process.
"Carry out such other procedures including three year review/audit of motor oil, high speed diesel and furnace oil procured by PSO to conclude whether or not, the price charged by PSO is a fair price.
"The auditors may carry out a research of regional pricing structure and an analysis of international oil prices, if and when required, and review broadly processes followed by other OMCs for purchasing such fuels.
"The Petroleum Division will ensure all assistance is provided to the auditors by PSO and all stakeholders."