ISLAMABAD - A parliamentary committee on Monday sought detailed reports from Oil and Gas Regulatory Authority (OGRA) and Oil Marketing Companies (OMCs) containing action taken against petrol pumps tempering with measurement and selling substandard fuel.

In the meeting of the Senate Sub-Committee on Petroleum and Natural Resources, Pakistan State Oil (PSO) acknowledged the sale of adulterated POL products in the market and said that kerosene oil is being mixed into gasoline and diesel. While chairing the meeting, Senator Taj Muhammad Afridi said that final report on the problem being faced by the oil sector will be submitted to the Senate Standing Committee on Petroleum. The committee also held discussion on a petition filed by Maqsood Ahmed Awan and Munawar Khan regarding problems being faced by the oil sector.

The committee also expressed concern that working papers for the committee meetings were not provided to parliamentarians in time and instructed to avoid such practice in future. OGRA informed the committee that under OGRA rule no oil company can operate without storage. However, the Ministry of Petroleum is allowing the companies to operate without the storage. Regarding the storage issue, OGRA informed that after the issuance of license, the Oil Marketing Company has to construct oil storage within three years and the government is making rule in this regard. Petroleum Ministry is responsible for the enforcement of the rules and regulations.

It was informed that several marketing companies were allowed to operate sans storages and OMCs are receiving illegal Inland Freight Equalisation Margin (IFEM). OGRA further informed that 10 oil marketing companies were fined Rs30 million for operating with storages. Similarly, nine oil marketing companies were fined Rs26 million for opening petrol pumps without permission. Action was taken against Asker Petroleum and Zoom Oil for opening petrol stations without permission but they have obtained stay from the court.

During the meeting, PSO also acknowledged the sale of adulterated POL products in the market and said that kerosene oil is being mixed into gasoline and diesel. The PSO official proposed that adulteration of POL products can be controlled if the kerosene oil prices increased. However, the proposal was rejected by the committee saying that if the price increase was the solution then what the employees of OGRA, PSO and other institution were doing. Senator Mir Muhammad Yousaf Badini termed a proposal given by a representative of PSO to increase the price of kerosene oil to prevent Adulteration in petrol and diesel ‘rubbish.’

The committee thoroughly discussed the IFEM, under which special tariff was charged for far-flung areas but the supply was delivered to nearby petrol pumps or dumped at illegal petrol pumps IFEM is the transportation cost from the refinery/port to the oil depots and storage facilities with no profit element for OMCs.

Expressing concern, Senator Taj observed that there should be an effective system of physical verification of oil depots and petrol pumps to curb any dumping. He underlined the need for an effective mechanism of checking quality and quantity of oil being sold at the dealers’ outlets.

Representatives of OGRA, OMCs and PSO apprised the committee that they have a mechanism to regularly check the quality and quantity of fuel being sold at petrol pumps, but could not give details like amount of fines imposed on how many petrol pumps in a certain period.

Representatives of PSO and Shell Pakistan said all oil tankers working with their companies had got installed tracking devices and there was no question of abuse of IFEM on their part.

Senators Baz Muhammad Khan and Mir Muhammad Yousaf Badini, representatives of PSO, OGRA, National Electric Power Regulatory Authority, Oil Companies Advisory Council, different OMCs and the petitioners attended the meeting.