Government ”forced” to provide Rs 50 billion subsidy on fertiliser: Asim tells National Assembly body

The government was forced to provide Rs 50 billion subsidy on fertiliser after the closure of fertiliser plants, Prime Minister”s Adviser on Petroleum and Natural Resources Dr Asim Hussain told members of the National Assembly”s Standing Committee on Petroleum and Natural Resources on Wednesday. 

He said that Rs 50 billion subsidy was given to the fertiliser sector as all plants had been closed because of a shortage of gas, adding that during the upcoming winter, the country would face serious gas shortage. The committee condemned the increase in petroleum prices and directed the Oil and Gas Regulatory Authority (Ogra) and the Petroleum Ministry to revoke the increase in petroleum prices and maintain previous prices by adjusting Petroleum Levy (PL). The Adviser also said that the CNG sector would be gradually phased out in the country and licenses of 15-year-old CNG stations would not be renewed. 

The committee meeting was held with Tariq Khattak in the chair. Expressing annoyance over the recent increase in prices of petroleum products, members of the committee also criticised Ogra and the petroleum ministry for divulging the decision two or three days ahead of the actual decision, saying it would lead to serious shortage of products, allowing oil mafia to earn billions of rupees by hoarding the product. 

Jamshed Dasti said that the Adviser was not in control of his ministry, adding that he was playing in the hands of bureaucrats. Barjees Tahir said that the Ministry leaked information about the price increase, favouring oil mafia. Sheikh Aftab linked the issue of oil supply by marketing companies with the purchase of lubricants. He said that only influential people were awarded contracts while others were ignored. 

Barjees Tahir and Jamshed Dasti informed the committee that SNGPL was providing uninterrupted gas to Galaxy Textile Mill which is owned by Hina Rabani Khar depite the load management plan. Both parliamentarians agreed that this textile mills was a defaulter of SNGPL on which SNGPL”s MD Arif Hamid said that the mill was “paying its dues” and was “not a defaulter”. 

Adviser to the Prime Minister Dr Asim said that the Ministry was aware of the situation and a letter had been written to Pakistan State oil (PSO) and other oil marketing companies (OMCs) to stop this practice. Dr Asim assured that news leakages regarding the price increase would be “controlled” and officials would follow a strict code of conduct. 

He said that the ministry followed a transparent pricing formula about petroleum products and anyone could forecast the price fluctuation ahead. The Ministry has no hidden agenda in this regard, Dr Asim added. Chairman of Ogra Saeed Khan and Dr Asim agreed to devise a mechanism to keep the decision of prices “secret” till the issuance of notification. 

During the meeting, the SNGPL”s MD said t hat his company was responsible for supplying gas to Punjab and Khyber-Pakhtunkhwa and because of gas shortage, SNGPL was getting 1.865 Billion Cubic Feet (BCF) of gas per day against a total demand of 2.6 BCF. He said that the company was facing a shortfall of 624 Million Cubic Feet (MMCFD) per day. He said that the shortfall was likely to increase to 900 Mmcfd in December this year, while in January 2013, it would rise to nearly 1100 Mmcfd. 

The panel expressed annoyance over the slow pace of work on development schemes by lawmakers, alleging that development funds for projects were being used elsewhere. Members of the committee said that because of mismanagement of departments MNA”s were asked about revalidation of funds. 

The SNGPL”s MD said that SNGPL still had funds for development schemes amounting to Rs 22 billion. The SSGCL”s MD said that his company still had Rs 4 billion earmarked for various development projects In this regard, the standing committee constituted a sub-committee under Jamshed Dasti and directed it to devise a mechanism for redressing the issue. 

Copyright Business Recorder, 2012

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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