ISLAMABAD: The government sent the chairman of the Oil and Gas Regulatory Authority (Ogra) on ‘forced leave’ and removed all members of the board of management of Pakistan State Oil (PSO) on Wednesday, blaming them for the recent petrol crisis.

Since chairmen and members of regulatory bodies are protected under the law, the government decided to send a reference against Ogra Chairman Saeed Ahmed Khan to the Federal Public Service Commission over his ‘misconduct’.

Also read: PM suspends officials over fuel crisis as anger escalates

“The competent authority is pleased to approve the holding of an inquiry against Saeed Ahmed Khan, chairman Oil and Gas Regulatory Authority (Ogra) by Federal Public Service Commission (FPSC). Saeed Khan is on leave for three months, or till outcome of inquiry, whichever is earlier,” said an official notification.

Sources told Dawn that the Ogra chairman was called to the Prime Minister’s Office a few days ago and an additional secretary conveyed him the prime minister’s displeasure over the petrol crisis and asked him to resign, but Mr Khan refused.

Through senior government officials and the chairman of a gas company, the Ogra chief was offered a position of his choice if he submitted his resignation or went on a long leave, but he did not agree to take the blame for the petrol crisis. He maintained that the law required Ogra to ensure development of storage capacity before issuing marketing licences but it was the responsibility of the petroleum ministry to monitor oil companies to build petroleum stocks for 20 days.

Saeed Ahmed plans to challenge action in court

The sources said Mr Khan had engaged lawyers to challenge the ‘forced leave’ in the Islamabad High Court on the ground that members and chairman of Ogra had a four-year job security unless found being physically or mentally incapable or committing misconduct.

With majority of top functionaries of the oil supply chain removed, officials said the affairs of the country’s largest oil firm were being looked after, on an ad hoc basis, by Shahid Khosa, a former executive of the Pakistan International Airlines without any formal notification as Petroleum Minister Shahid Khaqan Abbasi and the PSO acting managing director looked after proposed import of Liquefied Natural Gas.

At the petroleum ministry, additional secretary in charge Arshad Mirza and prime minister’s additional secretary Fawad Hassan Fawad were running affairs of the petroleum sector, the sources said.

The charge of Ogra chairman is expected to be handed over to member gas Amir Naseem because the posts of three other members have been vacant for more than a year.

A member of another investigation team comprising Barrister Zafarullah Khan and Tariq Khosa told Dawn that in a 20-page report, Petroleum Secretary Abid Saeed, Additional Secretary Naeem Malik and Director General Oil Azam Khan were accused of having failed to foresee the crisis or see if sufficient stocks were available as prices plunged.

The three were also accused of not sending a summary to the Economic Coordination Committee of the cabinet, which met two days before the crisis or inform the prime minister or the petroleum minister even though the ECC was given a presentation by the Federal Bureau of Statistics on lower petroleum stocks – eight days of petrol and 18 days of diesel as of January 6. “They failed to red-flag the situation.”

It said the acting managing director and two deputy managing directors of PSO were found responsible for delay in oil shipments and for failure to ensure 20-day stocks.

The investigation report held private oil companies responsible for the crisis, saying they had been earning huge inventory profits when the prices were going up and were required under the licence conditions to ensure 20-day ‘statutory stocks’ but did not care to avoid inventory losses in anticipation of price cuts.

The report blamed Ogra for failing to enforce 20-day stock position by oil companies even though it was responsible to develop storage capacity and stocks under licence conditions for oil marketing companies.

The member said the investigation team recommended removal of PSO officers from service after completing disciplinary action. The team also accused the board of management of having failed to play its supervisory role over the affairs of PSO and recommended their removal.

The investigation team also found a lingering dispute over freight rates between PSO and Pakistan National Shipping Corporation responsible for the crisis and reprimanded the PNSC management for taking the matter to court. The team directed the PSO and PNSC managements to resolve their dispute as soon as possible with the involvement of the petroleum ministry.

Published in Dawn February 12th , 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play