The Supreme Court on Monday directed the federal government to submit a report on liquefied natural gas (LNG) contract as it seems to be made in a non-transparent manner. A three-judge bench headed by Chief Justice Mian Saqib Nisar, which heard a suo motu on exorbitant prices of petroleum products, ordered the Petroleum Ministry and the Pakistan State Oil (PSO) to look into the matter of Imranul Haq's appointment as managing director PSO.
Both the ministry and PSO were asked to see whether the appointments made in the PSO by the previous government were in accordance with the law and whether there is any element of favoritism and nepotism as the high salaries were paid to the MD and some general managers.
The Chief Justice expressed displeasure over the poor performance of the NAB and asked its chairman and prosecutor general to meet him in the chamber. The NAB was directed to inform how many cases of PSO are pending and how many are in the process of inquiry/investigation.
Petroleum Minister Ghulam Sawar Khan, while appearing before the bench on short notice, said that NAB and the government are probing the matter regarding LNG contract. Attorney General for Pakistan Anwar Mansoor promised to provide the report on LNG within one week.
The auditor on the directions of the apex court filed the audit report of PSO. Let the department and the PSO submit comments on it, the court said.
The report says that the ex-depot price for PSO is monitored by OGRA, and procurements by PSO are governed by PPRA Rules. Taxes on such ex-depot prices are finalised by FBR. The report says that the possibility of any discount on import price is entirely dependent upon government to government negotiations. The PSO has been procuring motor spirit (MS) and high speed diesel (HSD) from a limited set of vendors.
The report mentioned that according to PSO, it has been purchasing MS and HSD from the lowest bidders through open international tendering in accordance with the PPRA Rules and accordingly is not allowed to negotiate with such bidders. Accordingly, the ex-depot price is largely, if not entirely, uncontrollable in the case of PSO. "Our compliance procedures at PSO did not highlight any significant deviations from processes and systems of control."
The report proposed that the federal government may explore available options, if at all, for government to government discounts on import costs.
The report further proposed the government: "Carefully explore oil futures, with baby steps in the first phase. Strengthening of OGRA for proactive monitoring of OMCs, contracts as well profitability. Consider a policy of non-adjustable taxes to remove subjectivity. Identify mechanism for targeted subsidies for the deserving Pakistanis. Review policies for IFEM, OMC margins and dealer commissions for adequacy and appropriateness. Capacity building at HDIP is needed to ensure that specifications are complied with."
During the hearing the Chief Justice remarked that the court is very sensitive to the issues of corruption and nepotism. He asked the petroleum minister that people have a lot of expectations from the government and things should be done in accordance with law. Don't indulge in favoritism, warned the CJP.
The CJP told the minister that the court is there to assist the government, but it would intervene if there is an element of corruption and misuse of authority.
The Chief Justice said this should be probed who had appointed the ex-MD PSO Imranul Haq, and what previous experience he had, and whether the appointment was made in a transparent manner or not. Overhauling is required because the accountability has been the slogan of this court and the government, the CJP told the minister. Those who looted the wealth of this country need to be held accountable. "We have done the exercise and have given the recommendations to the government."
Sarwar said the guidelines and instructions of the court would be followed and implemented in letter and spirit.
The Chief Justice said the government would have to work on war footing. He asked the minister to implement the directions before the next hearing and take help from the audit report.
Special Prosecutor NAB Akbar Tarar informed the court that NAB has completed its investigation into the PSO affairs and now it will probe the appointments and would file a reference in 2 to 3 weeks.
The Chief Justice said that there should be no loopholes in the references and if these are full of ambiguities and inadequacies the court would take action against the NAB officer. He said the judiciary is always blamed that it acquits the accused. He said if NAB performs its job and files the reference after thorough probes then the accused could not be released.
The Chief Justice asked Tarar to ask NAB chairman and prosecutor general to meet him in the chamber. The Chief Justice noted that a person against whom a case is pending is appointed as DG NAB Karachi, adding the NAB should put its own house in order.
Earlier, Chartered Accountant Mukhtar Kazmi informed that import cost of MS is Rs 61.72 and HSD Rs 67.05, the other costs on MS and HSD are Rs 10.17 and Rs 7.13 respectively, while the taxes are Rs 27.61 on MS and Rs 45.12 on HSD.
"The additional charge includes freight and insurance charges. PSO is abiding by PPRA rules by charging Rs 1.32 per liter," he explained.
"The dealer's commission is Rs 3.47 which is determined by the government while Rs 27 is paid in taxes which include a fixed customs duty and GST per liter is determined by the Federal Board of Revenue (FBR)."
The CJP inquired about how tax rates are determined by the government. The attorney general replied; "The OGRA gives recommendations which are then approved by the federal cabinet."
"If PSO does not determine the prices then why the former MD was paid a salary of Rs 3.7 million?" remarked the CJP in response. "Most general managers are drawing millions of rupees in salaries," said Justice Ijazul Ahsan.
The case was adjourned until October 10.