KARACHI: Chief Justice of Pakistan (CJP) Mian Saqib Nisar has asked the officials concerned to revisit the mechanism for imposing taxes on petroleum products and work out a plan to reduce levies on them.

The CJP was heading a three-judge bench of the Supreme Court hearing the suo motu proceedings about various taxes imposed on petroleum products at the apex court’s Karachi registry on Friday.

The bench directed the petroleum secretary, chairmen of the Federal Board of Revenue (FBR) and the Oil and Gas Regulatory Authority (Ogra), managing director of the Pakistan State Oil (PSO) and others to submit reports about a new formula for accurate fixing of the prices of petroleum products within 10 days.

The CJP observed that some documents were submitted and the officials concerned had briefed the court on the mechanism for imposing taxes on petroleum products. But, he added, still there were some dark areas that needed to be explained.

The CJP also took exception to the absence of Ogra chairperson Uzma Adeel during the hearing and ordered that the credentials, profiles and selection criteria for the Ogra chief, FBR chairman and PSO managing director be produced at the next hearing.

Warns nobody will be spared if any lacuna is found in statistics provided by officials

At the outset, PSO Managing Director Shaikh Imranul Haque informed the bench that in February three firms had provided raw petroleum and the landing/imported cost of petrol was Rs52.23 per litre.

He also submitted the formula surcharges and taxes on petroleum products and claimed that the process of tendering was conducted in a transparent manner. He said that besides the PSO, there were over 20 other oil marketing companies in the country.

He replied in the negative when the CJP asked him whether he was aware of the regional prices of petroleum products.

Responding to another question about the difference of imported price of petroleum products in other countries of the region, the PSO MD said that there could be a difference over premium, but he failed to explain it.

The CJP said the bench would appoint a team of experts to examine these statistics and warned that the court would not spare anyone if any lacuna was found.

He also asked the PSO chief why the inland freight equalisation margin (IFEM) was being imposed in Karachi or other areas where these products landed directly. The PSO chief contended that it was the government’s policy.

The bench also expressed serious resentment about 3.16 per cent commission being paid to the dealers and said that there were also loopholes in issues of dealership since influential people in collusion with the officials concerned were operating fuel stations. The PSO MD said this issue belonged to Ogra.

The in-charge of the Ogra’s finance section claimed that it was the federal government’s policy and they were only implementing it.

When the CJP asked about the approval of the cabinet, the official maintained that they were getting approvals annually. However, he remained unable to produce anything when the CJP asked him to present the approval of the government.

FBR Chairman Tariq Mahmood Pasha said that all oil marketing companies met every month and sent their recommendations to Ogra while the FBR imposed sale tax on petroleum products at the final stages.

The CJP deplored that the officials were shifting responsibility on each other and said that people were suffering as they had been burdened with taxes.

Finance Secretary Arif Ahmed Khan informed the bench that the caretaker government had imposed only 50 per cent deficit on petroleum products.

He replied in the positive when the CJP asked him if further increase in petroleum products was on the cards. The CJP censured the previous government for passing the deficit to the caretaker government.

Appointment of Pemra chairman

The bench was informed that the process for selecting a suitable candidate for the post of Pakistan Electronic Media Regulatory Authority’s (Pemra) chairman was stalled due to the intervention of the federal information ministry.

When the CJP inquired about the appointment of Pemra chief from All Pakistan Newspapers Society president Hameed Haroon — who is also part of the six-member committee tasked with searching and selecting a suitable candidate for the vacant post — he said that the committee had completed the process, but nobody had been notified yet since the information ministry was intervening in the issue.

When the CJP asked him whether it was brought to the notice of the apex court, Mr Haroon replied that they had sent a petition in this regard to the registrar of the Supreme Court six days ago. The CJP said that the matter would be fixed for hearing in the coming weeks.

The post of Pemra chairman has been vacant since the removal of Absar Alam, the previous chairman, on the orders of the Lahore High Court in December last year.

In May, a six-member committee was formed and it was given the responsibility of searching and selecting a suitable candidate for the vacant Pemra chairman post.

Published in Dawn, June 23rd, 2018