9 Petroleum Companies Hoarded Petrol in June and Made Billions: Report

The five-member Inquiry Commission headed by Additional DG FIA Abubakar Khudabaksh was formed in July this year to probe into sudden petrol shortage in the country earlier this year in June.

The findings of the commission have revealed that a lack of coordination among the departments working under the Petroleum Division was one of the primary reasons for the shortage. The report, a copy of which is available with ProPakistani, has revealed that Oil Marketing Companies (OMCs) deliberately stopped supplying petroleum products to pumps despite having considerable stocks at their disposal.

The commission has submitted its report to Prime Minister Imran Khan, and will be presented before the federal cabinet on Tuesday (today). The commission has also recommended strict action against the secretary Petroleum Division, DG Oil, OGRA and private oil marketing companies (OMCs).

The report has revealed that OMCs made Rs. 6 billion to Rs. 8 billion during the June oil crisis and emphasized the period between June 1 and 26, in saying that “OMCs committed every illegality in business as usual manner”.

It wrote that the prices of MS [petrol] were substantially cut on May 31 and the new price was set at Rs. 74.52 per liter as a result of internationally plummeting prices. This would have caused OMCs to incur a substantial inventory loss with free sale in June, so they simply let the supplies to dry out slowly, against all legal and moral norms.

Additionally, the report has uncovered numerable other failures of OGRA since 2002, including but not limited to the issuance of licenses to OMCs without proper evaluation of actual storage facilities, failing to ensure minimum stock requirements, imposing ritual fines on OMCs, issuance of unlawful provisional marketing licenses to OMCs, lack of any punitive action on illegal joint ventures or joint workings between OMCs, as well as being unable to put any mechanism for keeping any checks on operations of unlawful private storage companies.

The committee has recommended, “Such proliferation of licenses has upped the scale of malpractices including smuggling and adulteration”. The Inquiry Commission strongly recommended the dissolution of OGRA through an act of parliament within the next six months.

The report writes, “All OMCs (other than the Pakistan State Oil and Shell) proportionally held on to their stocks with knowledge of anticipated rise in prices. This has been proven during a ground check of filling stations and records submitted by the OMCs with affidavits”. However, OMCs did show sales on paper during this time but ground checking of the filling stations showed that OMCs were short on supply.

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