The Federal Investigation Agency (FIA) has detected a mega gas theft scam worth Rs 11 billion by CNG stations selling gas at discounted rates and still earning handsome profit. This was stated by the Director-General (DG), Gas, Ministry of Petroleum and Natural Resources, while briefing the subcommittee of National Assembly standing committee on petroleum and natural resources in Parliament House here on Wednesday.
The subcommittee also directed Petroleum Ministry to submit a report regarding individuals against whom references on LPG allocations were sent to National Accountability Bureau (NAB), along with the list of the directors of the companies receiving gas allocations since 1980 on directives of military generals and petroleum ministers.
The subcommittee grilled Petroleum Ministry and Oil and Gas Regulatory Authority (Ogra) for proposed increment in CNG price from January 1, 2009 despite profit spree by CNG stations on sale of gas.
"The price of CNG is Rs 36 per kg in NWFP, and Rs 40 per kg in Karachi. Why Ogra has proposed increase in gas price for CNG station from the New Year?" members questioned. The subcommittee directed Ogra to submit detailed report on mechanism adopted for determining prospective raise in CNG prices.
It took notice of LPG allocations made to different companies on the directives of generals and petroleum ministers and directed Petroleum Ministry to submit a report containing list of board of directors of companies which received LPG allocations since 1980. The members were shocked to know that General Zia-ul-Haq as in charge minister had allocated LPG quotas to different companies.
Petroleum Ministry officials stated that LPG had become "political gas" because Director General (DG) Gas, who was empowered to allocate LPG quota, was bypassed from 1980 to 2000. The Petroleum Ministry was also directed to submit a report on rules and regulations regarding the LPG allocations within a week. Ministry officials said that the role of government was excluded since August 2000 and LPG marketing stood de-regulated. "Under de-regulated regime, producers were allowed to market LPG and fix its prices," the officials said.
According to a report submitted to the subcommittee, the Oil and Gas Development Company Limited (OGDC) had made temporary allocations to LPG companies on the directives of Petroleum Ministry in 2000 and 2004. Replying to a question, the Managing Director (MD) of OGDC, Zahid Hussain, told the committee that the LPG companies were pre-qualified for temporary LPG allocations keeping in view their financial viability and reputation. He said that as many as 15 LPG companies were allocated LPG on advance payments.
"OGDC had advertised bidding of LPG allocations in August 2009 to invite parties for sale of LPG from Bobi and Kunnar gas fields but some companies had taken stay order from Sindh High Court," he said, adding that OGDC had taken the step to make system of LPG allocations transparent. He noted that OGDC management had also given the chance to the companies which were made temporary allocations of LPG.
Ijaz Chaudhry, Additional Secretary, Petroleum Ministry, said that the government would ensure allocations of LPG according to PPRA rules. The members of the committee proposed to allow the companies, except SSGC and SNGPL, to set up LPG air mix plants in the areas where there is no system put in place by gas utilities to provide natural gas to consumers.