ISLAMABAD: The Supreme Court expressed surprise on Tuesday that the government had paid no attention to a suggestion made by the Rana Bhagwandas Commission about devising a new pricing mechanism for petroleum products and wondered why prices of locally produced CNG, LPG, petrol and diesel were linked to the international market.

‘Fixing petroleum prices is the job of the government, but nothing has been done despite waiting for three months to let the government perform its job,’ a bench comprising Chief Justice Iftikhar Mohammad Chaudhry, Justice Jawwad S. Khawaja and Justice Ghulam Rabbani observed.

The court had taken up identical petitions of PML-N secretary general Zafar Iqbal Jhagra and PPP’s Senator Rukhsana Zuberi challenging the mechanism employed by the government to fix fuel prices.

‘Such cases should not come to courts,’ the chief justice observed.

He asked the government to provide a comparative analysis of POL prices in the international as well as domestic markets over the past few years.

‘You should have presented the proposed pricing mechanism before the cabinet for approval after the findings of the judicial commission, but a decade-old formula is in practice,’ the bench told Petroleum Secretary Mehmood Saleem.

At the last hearing, former attorney general Sardar Latif Khosa had informed the court that the government was preparing a long-term policy in the light of the judicial commission’s report although it was facing huge financial constraints in the shape of a budgetary deficit of Rs722 billion, debts of Rs800 billion and subsidies of Rs134 billion.

The petroleum secretary said that middlemen were earning Rs17 billion, but he had no answer when asked if the government had fixed the responsibility.

The PML-N leader’s counsel Ikram Chaudhry claimed that profits taken by middlemen amounted to over Rs200 billion.

When told that the liquefied petroleum gas (LPG) quota was always granted to a select few, the court asked the secretary to submit a list of people who had got the quota.

The chief justice observed that in a democratic set-up, monopoly in issuing LPG quota should be discouraged and the process should be decentralised to create competition in the market.

Advocate Ikram Chaudhry argued that all decisions taken by the Oil Companies’ Advisory Committee (OCAC) from June 29, 2001, to April 1, 2006, were in violation of the law because it had not been delegated powers to fix POL prices through an executive order.

He questioned the legal justification for the taxes levied by the government on POL products since 2001.

He said the imposition of general sales tax on the taxes amounted to double taxation.

The case was adjourned for Oct 29 when Advocate Khalid Anwer, representing the oil companies, is expected to submit a detailed reply.