Rizwan Ghani
PETROL prices have been increased. Concerned Minister and Advisor have failed to defend the decision and government should reverse the decision. Media is already warning about unfolding LNG crisis, increase in electricity prices. Possible levy on public to recoup Rs13-14bn by state owned oil company as private sector refused to accept government decision of lowering fuel prices. Reportedly billions (Rs30bn) have been siphoned off under Deems Duty (7.5% duty being collected since 2002 on HSD for upgradation of refineries). It is clear from the emerging details that like sugar, petrol crisis is also manmade. PM should therefore order JIT for forensic audit of energy sector for the last three decades to determine complicity, incompetence and corruption to bring culprits to book. The process should start with making IPP report public and firing of Energy Minister, SA on petroleum and concerned Secretary for having transparent inquiry. The timing of increase in fuel prices has prompted experts to opine that it has been done to collect levy targets of Rs450bn or so. Otherwise, why government would do it at a time when it is struggling to get its budget passed and if it fails then as per law PTI government will finish.
The increase in fuel prices should be decreased. Fuel taxes were taken as fixed in the press conference. Government will get Rs3.50 in tax while Rs18 will go as levy to petroleum companies. It should be brought to minimum. Our policy makers should help the public not the petrol mafia. Politicians have citied fuel pricing tables to help government bring down fuel prices in public interest instead of surrendering to oil mafia. Media has shown reaction of politicians, public and experts so government cannot escape accountability for inflation and resultant pressure on public due to increase in prices, unemployment and undermining of economy while country is fighting with Coronavirus pandemic. The price hike fact finding inquiry committee is a farce and it should be scrapped. It is clear from the media that the very people who are responsible for the crisis are now part of the committee. No one expects they will implicate themselves in the crime. Among other things, it was also responsibility of Petroleum Secretary to ensure availability and security of sustainable oil and gas for economic development and strategic requirements of Pakistan and to coordinate development of natural resources of energy.
In this regard, it has been pointed out that proposals could include improving refineries, storage capacity and timing of reviewing price increase from weekly to fortnightly basis will be given. In this regard it is pointed out that except one all other refineries are too old to be updated. Kerosene oil price is used more for diesel adulteration than by poor so its prices should be brought equal to price of diesel. Apart from profiteering, it was also pointed out that fuel was not imported to consume fuel that was imported at high cost including furnace oil. Billions of rupees have been increased in fuel prices. It was opined that the numbers could shame the sugar mafia profit of Rs300bn. The comparison of fuel prices with neighbouring countries is not justified. It was pointed out that Pakistan’s per capita income is lowest ($1400) against China ($9770), India ($2010) and Bangladesh ($1700). The price being quoted is of $41.02 not $43. The fact is government’s decision to devalue Rupee for increase in export has failed. The exports are same as they were for the last ten years. It has made elite with dollars richer. Even today if exchange rate is returned to Rs 100 for next two years and cut fuel prices by 60 percent (Rs 60/L = 42×170=7,140/159=Rs45) it will save three times more than what it expects to earn from fuel levy (Rs450bn).
The Energy Minister has failed to give credible energy policy in the last two years and he has been part of other governments also. The way he avoided giving clear answer in cabinet meeting on fuel crisis and stuck to his statement in parliament. It shows that he was aware of the unfolding crisis and he used his statement in Parliament because he knew that he had immunity which shows that it was all planned. The Petroleum Special Advisor has conflict of interest due to IPPs and that is why as per media reports IPP report has not been made public. It is time to sack the SA and PM should order release of IPP report. Furthermore, the continuation of SA with Energy Ministry has justified media criticism of conflict of interest. He should also be removed to have fair audit and investigation. Finally, it is a question of complicity, incompetence and corruption. It is about public interest versus mafias. It is about inflation versus poverty. It is about economy, jobs and incurring foreign debt. It is about strong or weak Pakistan and it is about our survival in the region. In short one thing is linked to another and energy sector audit is needed to break this chain of loot and plunder, expose people occupying public offices and government jobs while serving vested stakes. It is about accountability of a democratic government to its voters and above all protection of the weak against the strong: the very definition of government. It is therefore hoped that PM will uphold his oath and order the inquiry without any further delay. Otherwise, state and judiciary will have to play their role in public interest.
—The writer is senior political analyst based in Islamabad.
Time for energy sector audit
