The issue of keeping prices of petroleum products unchanged and denying relief to consumers when prices in international market were showing significantly downward trend echoed in the Senate on Thursday.
The Standing Committee on Petroleum and Natural Resources strongly called for realistic view of POL prices by the Oil and Gas Regulatory Authority (Ogra) without any further delay.
Committee Chairman Syed Dilawar Abbas of ruling PML supported the opposition's contention that in view of falling POL prices, the inflation-hit consumers should get some relief.
Senator Farhatullah Babar of PPP-Parliamentarians raised the issue on a point of order and demanded probe into the functioning of the Oil Companies Advisory Committee (OCAC). He sought an explanation from the government as to why prices had been kept unchanged when these had shown significant fall in the world market.
"Petrol is available at $58 per barrel in the international market unlike its price few weeks back that was $70 per barrel, but no relief whatsoever has been given to the common man even in OCAC's Tuesday meeting," he argued.
Senator Farhatullah Babar complained that the issue of making Ogra responsible for POL price fixing has been raised several times, but the government policy on the issue remains the same. He dubbed the OCAC as a cartel and called for a thorough probe into its functioning.
He also sought clarification on some reports that oil had been dumped in Northern Areas.
Abbas also presented in the House the Committee's report for January-June 2005, strongly recommending fixing of prices by the Oil and Gas Regulatory Authority without any further delay.
The Committee's report, in its recommendations, observed that the government should ascertain how much relief could be given to the public by curtailing levies like excise duty and sales tax.
Parliamentary Affairs Minister Dr Sher Afgan Niazi wanted Petroleum and Natural Resources Minister Amanullah Jadoon to make a policy statement on the issue in the Senate.
The Committee in its report emphasised that MS ex-refinery price might be reviewed on the basis of MS 92 RON or 5 MS 95 RON Arab Gulf market price instead of existing Naphtha+$60.
"As the Committee's earlier recommendations are with the ministries of finance and petroleum and natural resources for consideration. It is, therefore, expected that some relief should be given to consumers," it noted.
The Committee was of the view that petroleum development surcharge should be kept at zero till the prices of crude and by-products in international market come down and stabilise.
To make the federation stronger, the assets and resources of the provinces should be shared more generously with the people of the federating units to make them prosperous.
The chairman constituted a sub-committee on pricing to analyse and understand the pricing mechanism and present its observations and recommendations. This was done after difference of opinion among members on the role of OCAC or Ogra in price fixation.
The sub-committee comprising Senators Sarwar Khan, Ms Rukhsana Zuberi, Mouhim Baloch, Saeed Ahmed, and Ismal Buledi noted that the increase in oil price does not truly represent only the price fluctuations in international market.
It noted the prices are inflated and people over a period of five years have paid Rs 150 billion. And, the worst part of this issue is that this colossal amount did not go to the national exchequer, but was shared between refineries, oil marketing companies, multi-nationals and the shareholders.
Similarly, oil marketing company margins should be fixed: the refineries are getting the margins of the Middle East as their products are based on import parity and the port charges per ton in pricing mechanism is higher than actual.
The sub-committee also noted that earning per share has gone up 10 times as compared to the year 1999.
It pointed out that oil marketing companies have been getting finance from public for the last four years in terms of deemed duty and have not invested in the areas to configure and expand as clearly stated in the revitalisation summary.
On this, the sub-committee had also recommended that regulatory role be given to Ogra: its members should be impartial, including people who aim at protecting consumers' interests.
It had called for removal of 70 percent import duty, as it goes to refineries.
POL prices issue was raised by the opposition during the previous session of the National Assembly and former petroleum and natural resources minister Nisar Ali Khan of PML-N had called it sheer injustice to consumers that despite fall in prices, relief was denied to them.