Committee expresses concern over petroleum taxes, criticizes PRL and SSGC for non-compliance, considers privilege motions
Islamabad (Izhar Khan Niazi): The Senate Standing Committee on Petroleum met at Parliament House under the chairmanship of Senator Umer Farooq to review the newly introduced daily petroleum pricing mechanism, appointments of chief executives in state-owned petroleum companies, the composition of their boards of directors, and the implementation of the committee’s previous recommendations.
The meeting was attended by Senator Qurat-ul-Ain Marri, Senator Saifullah Abro, Senator Abdul Wasey, Senator Rana Mehmood-ul-Hassan, Senator Sadia Abbasi, Senator Hidayatullah Khan, and Senator Ameer Waliuddin Chishti, while Senator Jan Muhammad participated as a special invitee.
The committee held a detailed discussion on the recently introduced daily petroleum pricing system and questioned the rationale behind replacing the previous fortnightly pricing mechanism. The Federal Minister for Petroleum informed the committee that the federal government had transferred the authority for petroleum price determination to the independent regulator, the Oil and Gas Regulatory Authority (OGRA), with the aim of insulating the process from political influence.
The Chairman of OGRA briefed the committee that petroleum prices are determined based on the seven-day average of Platts benchmark prices in the international market. He explained that this mechanism prevents sudden fluctuations in global oil prices from being immediately passed on to consumers. In particular, it helps shield the public from sharp price shocks during periods of geopolitical tensions, such as the United States-Iran conflict, while also discouraging profiteering and speculative practices. Committee members further emphasized the need to digitize the petroleum supply chain to effectively curb fuel adulteration, smuggling, and hoarding.
The committee expressed concern over the high level of taxes imposed on petroleum products. Representatives of the Pakistan Petroleum Dealers Association informed members that daily price changes were creating operational challenges for fuel dealers. In response, the committee chairman directed OGRA to consult all relevant stakeholders, including the Petroleum Dealers Association, and submit a report containing practical recommendations to the committee.
The committee also expressed strong displeasure over the absence of the Managing Director of Pakistan Refinery Limited (PRL) from the meeting and the failure to provide the required information. Members discussed the possibility of moving a privilege motion against the Managing Director of PRL. The Petroleum Division was directed to submit complete details regarding the boards of directors and senior management of all state-owned petroleum companies.
Reviewing the implementation of its previous recommendations, the committee expressed serious dissatisfaction over the Sui Southern Gas Company (SSGC) for failing to comply with committee directives, not providing details of its board of directors, and not issuing a formal apology for inappropriate remarks made about the committee. The committee also considered initiating a privilege motion against SSGC and directed the Petroleum Division to review the tenure of board members who have served beyond their prescribed terms and submit a comprehensive report.
The Standing Committee also took serious notice of the failure to conduct audits of oil rigs and directed the relevant authorities to submit an audit report within seven days. In addition, the committee reviewed matters relating to LPG quotas and licensing and instructed OGRA to convene a meeting of all relevant stakeholders and present a detailed report before the committee.