TheTruth About Oil

The report by a five-member commission set up by the prime minister in July to look into the oil crisis, which hit the country in June this year, does not make for pleasant reading. The report which has been made public blames Ogra, the Ministry of Petroleum, private oil companies and others involved in the delicate business of purchasing and regulating oil, for the crisis. As Geo TV has been repeatedly reporting and highlighting, notably in its show hosted by Shahzeb Khanzada, the oil crisis began when global prices fell in March and April this year. But instead of purchasing oil in large quantities and storing it for later use when prices rose, Pakistan imposed a ban on bringing oil into the market. This ban came from the Ministry of Petroleum. The reasons are still somewhat uncertain, but as the report says, they highlight the incompetence of the petroleum division of the energy ministry and the fact that decisions within it, aided by Ogra, may be made to favour particular private oil companies.

The result of this was that at a time when oil was available in large quantities and at cheap prices, Pakistani consumers were forced to queue for hours at petrol stations. While Shell and PSO did not put oil into the black-market or hoard it as other companies did, most other private oil companies acted in this fashion and insisted on selling only High Octane, which does not fall under regulation by the regulatory authorities. The Inquiry Commission has also recommended there be a detailed report into the role of all regulators whether they deal with oil, with other sectors like electricity or with the media. It has also sought the disbandment of Ogra within the next six months after a parliamentary bill for this purpose. The cabinet has already been discussing the report and its implications.

The contents of the report point to the serious lack of competence, and inability to manage affairs and possible dependence on individuals within the petroleum ministry who misguide top officials for their own purposes. They also indicate that Ogra has failed in its purpose of regulating oil and controlling the companies which sell it through their petrol stations. While the rest of the world including India was busy stocking up on oil, Pakistan apparently failed to give an order to use available oil tankers that float on sea to stock oil and keep it for future use. This would have allowed low cost oil to be available for a far longer period. The Ministry of Maritime Affairs says it received no such orders, although SAPM Nadeem Babar has said he had issued such a directive. The affair is a saddening one, and shows just how easy it is for Pakistan to lose billions in valuable resources due to sheer incompetence. For now, we have a crisis with no oil available for some days in January, at a time when it will be in peak demand. Decisions must be taken that can prevent such a calamity in the future.

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