The judicial commission, probing into nitty-gritty of oil pricing and profits earned by the government, would start taking input from the relevant authorities here from May 3 to 8. It has been learnt by Business Recorder on Saturday that after having completed first session in Karachi, the commission moved to Islamabad and would spend five days, receiving inputs from the relevant ministries.
Overcharging on petroleum products by the government was challenged in the Supreme Court through identical constitutional petitions of Pakistan People''s Party Senator Rukhsana Zuberi and Pakistan Muslim League (Nawaz) Secretary General Zafar Iqbal Jhagra in 2005.
On March 30, a three-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, observed that to resolve the controversy, an exercise had to be undertaken starting from the date when the Oil Companies Advisory Committee (OCAC) was authorised to fix prices of oil and gas, ie from June 29, 2001 to April 1, 2006 when its authority was given to the Oil and Gas Regulatory Authority (Ogra).
Headed by former Supreme Court judge Rana Bhagwandas, the commission consists of F.A. Ferguson (charted accountant firm), Ministry of Environment, Ministry of Petroleum, Ministry of Finance and public representatives. The commission can also take services of independent experts, if needed.
Earlier on April 16, Pakistan Petroleum Dealers Association (PPDA) submitted its input as stakeholder to judicial commission, and called for revision in current oil pricing formula to include the petroleum development levy (PDL) in consumer price for calculating their margins on petroleum products.
The PPDA submitted to the commission that the government in the existing oil pricing formula was giving margin to the dealers by excluding the PDL. In the existing formula, the government had enhanced the margin of dealers from four to five percent, and dealers association requested the commission to include the PDL to calculate the margins to sustain business.
According to the sources, the government has earned Rs 58.533 billion PDL from consumers during the first eight months (July-February) of the current financial year to bridge the revenue shortfall to fulfill its commitment to the International Monetary Fund (IMF). The association claimed that they were receiving margin around 2.5 to 2.6 percent instead of five percent in the current oil pricing formula that was hitting their business.
The association is of the view that while preparing the existing oil pricing formula in which the government had placed lower cap and upper cap from 45 dollars to 80 dollars per barrel crude oil price for the dealers and Oil Marketing Companies (OMCs) margins, its demand of including PDL to calculate their margin was turned down. The dealers also urged the government to fix the profit at Rs 1.46 per litre on petrol and diesel that was also rejected.
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