Special Assistant to the Prime Minister on Petroleum Nadeem Babar has been asked to resign from his position over last year's fuel crisis, federal minister Asad Umar announced on Friday.
Addressing a press conference, he said Prime Minister Imran Khan had asked Babar to step down from the position for a 90-day period, during which the Federal Investigation Agency (FIA) will conduct a forensic investigation into the "criminal acts" that led to the fuel crisis.
The agency will be bound to submit its report within 90 days based on which prosecution of the elements involved will be done.
Meanwhile, the petroleum secretary will also be given an order to report to the establishment as soon as the decision for his replacement is made, which Umar said will be before the start of the forensic probe.
The minister stressed that the decision was not being taken because any unlawful step had been spotted by the government related to the SAPM or the petroleum secretary.
"The prime minister has taken this decision because the investigation of the whole chain has to happen; there are investigations of billions of rupees worth of loss to the nation, that is why to bring this certainty that there is not even a doubt that anyone could influence [the probe], these actions have been taken for both these individuals," the minister said.
Umar said the fuel crisis last June, which lasted 3-4 weeks, not only saw a shortage of petroleum products in the market but overpricing was also observed in some cases. The prime minister ordered the FIA to carry out an inquiry into the crisis, and the agency submitted its report to the cabinet a few months ago.
A cabinet committee was subsequently formed to review the FIA report and submit its recommendations to the premier.
Sharing the final recommendations of the committee with the media, Umar, who along with three other ministers was a member of the body, said the recommendations had been divided into three categories. The first section comprises the alleged "criminal acts" on which criminal cases can be filed, the minister revealed.
In order to bring the evidence of such acts in such a shape that cases can be filed on its basis, "the FIA is being given the mandate to conduct a forensic investigation and complete its report within 90 days," he said.
The FIA forensic probe will investigate:
- Whether the oil marketing companies fulfilled the minimum requirement for maintaining inventory as per the law
- Whether the sales reported actually took place or was there any difference between the actual sales and the sales reported on paper — and if there was a difference then how much was it and who was behind "this criminal action"
- Whether hoarding of a product was done and if it was then who did it
Some other issues that are not directly linked to the crisis last year but constitute systematic weaknesses in which violations of the law have taken place will also be part of the probe. They include:
- The issuance and subsequent misuse of provisional marketing licences
- Signing of illegal hospitality agreements about where a product will be stored
- Sale of a product at illegal retail outlets
- Deliberate delay in the berthing of oil ships stationed at outer anchorage so they can be berthed when new, higher prices become effective
- Illegal sale of oil
Umar said according to the first FIA report, all of the above regularities took place prima facie and the forensic probe would now seek to collect their legally admissible evidence.
Once criminal liability is established, the minister said, "the full force of the law should be used and cases pursued." He added that the result of the probe should be corrupt elements "being handcuffed and going to jail".
Umar said besides conducting the forensic of government institutions, oil marketing companies, retail petrol pumps, etc., the probe will also seek to identify "those government people who assisted in and were part of the criminal acts". To this end, all the persons involved in decision-making in the Petroleum Division and the Oil and Gas Regulatory Authority (Ogra) staff would be subject to investigation, the minister added.
Regarding the administrative actions suggested by the FIA, Umar said according to the report, "some of the people sitting in administrative positions don't have the capability or ability to be sitting on those positions. The Petroleum Division has been told to look at those administrative decisions and quickly report to the PM after making those decisions."
He noted that the Petroleum Division, which represents the executive branch, and Ogra played a central role in the law according to which all the petroleum sector was run.
He said an "ambiguity" had been created by the lawmaking done so far about which actions were the responsibility of Ogra, the regulator, and which were to be taken care of by the Petroleum Division.
"To end that ambiguity, a law will be made and whatever amendments are required [will be done], so it is completely clear who has the authority and responsibility," he said, adding that during the investigation into the fuel crisis, Ogra stated that some tasks were to be done by the Petroleum Division and vice versa, "and both were quoting different sections of the law".
Umar said the punishments for many actions that could cause loss to the economy and the people were very weak, announcing that "the law will be revisited [and] the punishments and sentences will be made according to the consequence — meaning the harm that is possible from them."
A number of other things have also been identified for improvement in the petroleum sector which will be reported to the Petroleum Division following which it will make its action plan, the minister revealed.
He said Prime Minister Imran Khan always sought to make the lives of Pakistanis better and one of the challenges in such efforts was the existence of "big cartels" and mafias in different sectors "which for many decades have become stronger and stronger".
Umar said after the report into the fuel crisis was made public on the premier's orders, critics had questioned who had been punished in light of the probe.
"Now the time is coming for punishments," he said, stressing that the prime minister was determined that the cartels and mafias "will not be forgiven in any case".
"And when these actions are taken, these very powerful mafias and cartels will not sit and accept quietly and silently the PM's decisions and stay at home," Umar said. "They will try to create a lot of difficulties but the prime minister is ready for that and that's why there is a message for all these cartels from the PM that your time has come to an end and now the time of the people of Pakistan has come."
The minister said there was "no doubt" that the institutions which were responsible for preventing corrupt practices had failed in fulfilling that duty.
"We have to determine exactly whether that responsibility was not fulfilled just because they were not qualified or they had any confusion in their mind about their power and authority and where their personal interests were directly involved and where they colluded in this theft," he emphasised.
"The PM is clear that those who are responsible and involved in this crime, whoever they are, go to jail and are handcuffed."
The crisis and the probe
In June last year, the country witnessed a severe petroleum shortage, ostensibly due to falling global prices and the attempt by the oil industry to avoid inventory losses.
Subsequently, Prime Minister Imran Khan ordered an Inquiry Commission to ascertain the facts behind the shortage and fix responsibility.
The Inquiry Commission, headed by Abubakar Khudabakhsh, the additional director general of FIA, originally comprised seven members, including those from investigating agencies, former members of Ogra and attorney general, but later co-opted eight other experts to complete the task.
The commission’s 163-page report, issued in December, had hurled scathing allegations at the entire oil supply chain, from policymakers to regulators and market players down to retail outlets, besides recommending departmental proceedings against top hierarchy of the Petroleum Division, dissolution of Ogra and a halt to the operations of refinery and oil marketing company Byco.
The commission had also estimated over Rs250 billion worth of oil smuggling from Iran and noted that a wide range of operations in the oil sector were against the law and rules, operating in a vacuum and without any check and balance.
Speaking alongside Umar, Education Minister Shafqat Mehmood said Babar and the petroleum secretary being asked to step down did not mean that any investigation or proceedings had been done against them.
"This has been done so the inquiry which has to happen and the forensic evidence that has to be collected, there is not even a doubt that those people who were managing these affairs at the time can somehow influence that inquiry," he stressed. "So this distinction is very important to be kept in mind that they have been asked to step down in an effort to make that inquiry fair and transparent."
Asked why no action was being taken against federal Minister for Energy Omar Ayub Khan, Umar said Khan's role was on a policy level and he was "not directly involved in these operational affairs".