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| December 1, 2005 | Thursday | Shawwal 28, 1426 |
High Court seeks govt policy on POL prices
LAHORE, Nov 30: The Lahore High Court on Wednesday directed Deputy Attorney-General Dr Danishwar Malik to submit the government policy and formula on getting the oil and other petroleum products’ prices determined by the Oil Companies Advisory Committee every two weeks.
Proceeding in a writ petition moved by advocate MD Tahir, the court instructed the federal government law officer to file a report within two weeks.
Mr Tahir had, through the writ petition, challenged the occasional rise in oil prices, which, he stated, were not compatible with global oil prices. He stated that the oil prices fell from $70 a barrel to $57, but the government had not passed on to the people the relief in the import of oil. He stated that the rise in petroleum prices on Oct 1 this year was unwarranted and added to the miseries of the people.
Earlier, the Ministry of Petroleum and Natural Resources submitted that the federal government sold in May 2002 six ‘minor interest’ oil fields to multi-national companies for about US$168.2 million after international bidding.
In a para-wise comment, the ministry stated the oil fields were sold as they were meeting only three per cent of the national requirement. The report said the country’s annual oil consumption was 336,000 barrels a day whereas the total average share of the six oil fields was 9,423 barrels a day.
According to the ministry report, the oil field at Badin-I was sold for US$143 million, Badin-II for US$8.5 million, Adhi for US$11.33 million, Dhurnal for US$3.834 million, Turkwal for US$2 million and Ratna for US$532,500.
The report quoted technical assessment of the oil fields and submitted that the oil fields were disposed of keeping in view their fiscal management, tax and royalty recovery, political risk and future production profiles, and none of the factors suggested that they should be kept as national assets.
The ministry submitted that the government’s working interest in nine oil fields was assessed by an international company as well as reputed international investments banks having vast experience of sale and purchase of petroleum producing properties. The company was also a large commercial and technical advisor to oil producing and major consuming countries, including the USA, the UK, Venezuela, Brazil, Argentine, Singapore and Australia. The government accepted the recommendations to sell six of the nine oil fields, according to the report.
PRICES: As for the raise in POL prices, the ministry report submitted that the committee had made adjustments for 92 times since the OCAC was established through a government notification about five years ago. According to the report, the committee raised the prices for 42times, lowered them for 23 times and kept them unchanged for 27 times.
The report submitted that the OCAC was competent to take a review of oil prices every two weeks under a government authorization and a formula. The formula linked oil prices to the international market, particularly the Gulf states. It submitted that the formula had been fixed by the ministry after it was approved by the Economic Coordination Committee.
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