Govt urged to find ways to lure 2.2m away from oil smuggling

Published February 2, 2021
A meeting of the Senate Standing Committee on Petroleum  was informed that about 2.2 million people were associated with oil smuggling in Balochistan. ─ Reuters/File
A meeting of the Senate Standing Committee on Petroleum was informed that about 2.2 million people were associated with oil smuggling in Balochistan. ─ Reuters/File

ISLAMABAD: A parliamentary committee on Monday asked the government to commit a major part of savings from its drive against smuggling of petroleum products through the Iranian border worth over Rs200 billion annually to livelihood projects to avoid any unrest arising out of closure of illegal business of the people involved.

A meeting of the Senate Standing Committee on Petroleum presided over by Senator Mohsin Aziz was informed that about 2.2 million people were associated with oil smuggling in Balochistan because of limited job opportunities.

Senator Kabir Shahi feared that when the borders are closed and oil smuggling is completely eradicated, these people would have nothing to do and would tend to get involved in anti-social activities and unrest.

Senate body fears that if Balochistan’s illicit fuel business is eradicated, people will take to anti-social activities

The committee recommended that “the government must provide alternative source of livelihood to those who are affected by this measure in Balochistan”.

Responding to a question, Petroleum Secretary Mian Asad Hayaud Din told the committee that the Iranian fuel provided Rs50-55 per litre cushion to those involved in its smuggling. It was explained that the Iranian government had nothing to do with the smuggling but the subsidy it provided to its people was being misused by those living on both sides of the border.

The committee was informed that import of petroleum products from Iran was very viable economically, but Pakistan could not consider it owing to US sanctions on Iran.

Briefing the committee on actions taken to curb the smuggling of oil, the Petroleum Division said a national task force had been constituted to launch a coordinated effort against the smuggling and illegal distribution of petroleum products in the country on the directives of the prime minister. The Balochistan chief minister and home secretary are conveners of the task force.

The committee was informed that smuggled Iranian diesel fulfilled 19.5 per cent of total demand in the country. Under a strategy developed by the Federal Board of Revenue, in the first stage illegal retail outlets will be sealed as they are the prime beneficiaries of the smuggled fuel in Punjab, Sindh and Khyber Pakhtunkhwa. In the second phase, the problem will be addressed in Balochistan.

On the issue of absorption of employees of Lakhra Coal Development Company, the committee was informed that LCDC was established as a joint venture in 1990 between Pakistan Mineral Development Corporation (PMDC), the government of Sindh and Water and Power Development Authority (Wapda).

The renewal of coal mining lease granted to the company was declined by the government of Sindh in 2019 and thus the company was deprived of the source of revenue generation. The committee was also told that the future of LCDC and its employees was deliberated upon by the company’s board of directors and since there were no visible business development avenues, the employees were served notices and a financial plan for payment of their dues was now being worked out.

The committee was informed that no response had been received from the government of Sindh despite repeated reminders on the issue and even though Sindh Energy Minister Imtiaz Shaikh was its director, he never attended the board meetings.

The committee took cognisance of the dire financial burden faced by the LCDC employees and considered two proposals to facilitate the employees — payment of outstanding dues to the employees be given by PMDC, Wapda and the Sindh government in line with shareholding or the lease agreement be drawn in favour of PMDC.

The committee directed LCCDC to share audited figures of outstanding liabilities with the government of Sindh within three days after which the panel would reconvene within next 15 days to take a final decision on the matter.

On the current situation of a pending issue between the federal and Sindh governments on laying a 17km pipeline for imported gas, the committee was informed that that Sui Southern Gas Company Limited (SSGCL) had completed the pipeline on Dec 22, including modification of required facilities at Bin Qasim and Pakland.

The committee expressed displeasure over the inordinate delay in beginning exploration activities at Kohlu block. The Petroleum Division told the panel that last extension was granted with effect from Jan 1, 2020 for a period of two years to facilitate state-run Oil and Gas Development Company Limited (OGDCL) to discharge its minimum work obligations which had been pending for a long time due to the volatile law and order situation in the area.

The meeting was told that OGDCL, as an operator of the block, had been continuously pursuing the authorities concerned for provision of security cover for immediate commencement of exploration activities in the area.

The committee directed that all-out efforts be made to ensure that work commenced at the earliest and a monthly progress report be submitted to it.

The panel directed the Balochistan mine and mineral development department that in order to protect the miners’ lives, all ‘C’ category mines, which are the riskiest, must be upgraded to ‘B’ category or be shut down.

The committee directed the Balochistan government to notify Rs500,000 per head compensation by the employers immediately as previously agreed upon by the provincial government.

Published in Dawn, February 2nd, 2021

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