Clarification On Oil Inquiry
CLARIFICATION ON OIL INQUIRY
A news item appearing in DAWN on 15th May 2006, says that Oil Marketing Companies have threatened to pull out Rs 1 billion investments if government accepts NAB’s proposal to recover Rs.4.5 billions from them.
It is clarified that NAB is neither focusing on Foreign Oil Marketing Companies nor on foreign investment. The focus of inquiry is purely to check the implementation of government policies, which have been issued on the subject from time to time based on Cabinet decisions. Ironically, Ministry of Oil and Petroleum has created a lobby to pressurize NAB to shelve the ongoing inquiry by disseminating misinformation regarding the intent of the inquiry.
It has been disclosed that the Ministry of Oil and Petroleum had told foreign oil marketing companies that as a result of this inquiry the companies would be forced to pay back the exorbitant and uncalled for profits running into billion of rupees to Govt of Pakistan. It is clarified that this is complete disinformation being spread with intent to create panic amongst the Oil Marketing Companies, thus creating pressure on the Government and NAB to shelve the inquiry.
The major flaw in the oil fixation mechanism was that in June 2001, the Federal Cabinet decided to transfer the oil price fixation function to Oil Companies Advisory Committee (OCAC) subject to monitoring / regulating by Director General Oil, M/O Petroleum & Oil. However the same was not followed by the Ministry resulting into non-transparent fixation of oil prices as also observed by World Bank Report of 2003.
Needless to say that rapid escalation of oil prices adversely affects all commodities and financial activities in the country, therefore there is a dire need to review the entire mechanism of oil price fixation so that it is not only fair but also transparent.
NAB asserts that the sole purpose of the oil inquiry is to bring to light the non-implementation of Government policies so that Government can take adequate remedial measures in order to eliminate the chances of their recurrence.
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