ISLAMABAD, Nov 24: Pakistan Peoples Party on Thursday demanded NAB inquiry into the OCAC oil price mechanism, and said that the task of fixing oil price should be withdrawn from the cartel of oil marketing companies under the name of Oil Companies Advisory Committee (OCAC) and handed over to the Oil and Gas Regulatory Authority (OGRA) the statutory body created for this purpose.

In a statement the party spokesman Senator Farhatullah Babar said that serious bungling in the oil prices had come to surface in replies given to Senate questions that could no longer be covered up.

In reply to a question about progressive increase in transportation margin allowed to each oil company last year the Petroleum Minister said in the Senate on Thursday that the margin, which was only Rs2 per litre in July 2004, had been increased to nearly Rs10 a litre by December that year.

“Increasing the transportation margin to the companies from Rs2 a litre to Rs10 a litre in a short span of six months is a scandal of monumental proportions that needs to be investigated.”

An increase of Rs8 per litre in transportation margin to the oil marketing companies amounted to an unprecedented five hundred per cent jump. It amounts to scandalously robing the poor of the country of tens of billions, he said.

He said that if say ten million litres of oil were transported daily within the country the transportation margin given to oil companies in July was Rs20 million but for the same quantity of oil transportation in December the daily transportation margin went up to Rs100 million.

It translates into a windfall gain of nearly Rs30 billion to the oil companies in a year. If this is not a scandal what else is it, he asked?

He said it is ridiculous to claim that oil prices are fixed in accordance with a formula approved by the government. “What is the rationale for the formula that allows an increase of five hundred per cent in transportation margin to the oil companies in just six months”?