ISLAMABAD, April 25: The government has ordered a “special audit” into the last five years of oil pricing process following reports of alleged wrongdoings that put extra burden on domestic consumers when compared with international prices.
Informed sources told Dawn on Monday that the case had been referred to the Auditor General of Pakistan (AGP) through proper channel to conduct a special commercial audit of the oil pricing thoroughly by looking into record of petroleum ministry and public and private sector oil marketing companies and refineries.
These sources said while annual audit by the AGP of public sector companies and by internal auditors of private companies was a routine, the special commercial audit by the AGP would cover five years of oil pricing as a whole.
The commercial audit would determine whether or not the oil companies had manipulated the oil prices to their advantage or they had followed the formula provided by the petroleum ministry in letter and spirit.
Meanwhile, the National Accountability Bureau (NAB) has taken into custody the whole five-year record of the petroleum ministry pertaining to the oil pricing for examination.
The ministry, said these sources, has also responded in writing to a NAB questionnaire. In its response, the ministry had taken the stand that the policy of oil price deregulation was approved by the then chief executive Pervez Musharraf in 2001. A subsequent price calculation mechanism was also approved by a meeting of the then federal cabinet.
The policy and the calculation formula were implemented by the OCAC in letter and spirit. The petroleum ministry had also taken the position that it used to take the finance ministry and then the prime minister into confidence on each quarterly price revision calculated by the OCAC.
Hence, the whole deregulation policy and oil pricing was a collective responsibility of the government and petroleum ministry officials could not be singled out if at all there was any discrepancy.
The NAB officials, these sources said, are still not clear in what circumstances the departmental enquiry into the dumping of oil products was shelved and how the ECC approved revision in pricing formula on a October 18 summary that contained self-contradictory figures.
The main summary contended that light crude oil prices had touched highest level of $60.5 per barrel in August 2005 and high speed diesel peaked at $68 per barrel. On the contrary, an annexure of the same summary revealed that light crude oil in the Arabian Gulf had never crossed $42.6 per barrel and HSD prices peaked at $53.92 per barrel in August 2005.
The sources said the NAB and AGP had also been asked to coordinate and ascertain whether Rs22 billion paid to OCAC members as price differential claim was based on prudent cost estimates and how a $15-20 per barrel difference was recorded by the petroleum ministry.
