ISLAMABAD, Dec 29: Former petroleum minister Usman Aminuddin has said the government did not fully abide by the petroleum sector deregulation plan which was aimed at controlling domestic oil prices by restricting profit margins of oil companies and distributors that hit through the roof in the recent years as a result of an international spike in oil prices.

“There cannot be any perpetual profits. It can’t be haywire,” said Mr Aminuddin who was the petroleum minister when the government allowed a total of 7.5 per cent profits to oil companies and retail outlets replacing existing fixed margins of 16-58 paisa per litre on various products. He remained a member of General Musharraf’s cabinet for three years after the military take-over in 1999.

Since 1999, the margin of oil marketing companies has increased by 550 per cent and 239 per cent in case of diesel and petrol respectively. Similarly, the margin of dealers increased by 825 per cent and 379 per cent on diesel and petrol respectively.

Mr Aminuddin said he had himself introduced the concept of capping ex-refinery prices of petroleum products and restricted well-head gas prices to a maximum of $36 barrel of international oil equivalent. The original plan also envisaged capping of margins for oil marketing companies and the retail outlets but “this was not fully implemented, subsequently”.

“Since the margins are linked with price, capping is a must,” he said. “I have repeatedly asked the government to cap these margins.”

He said the taxation potion on oil products also needed to be rationalised because of the unprecedented price hike in the international oil market.

The former petroleum minister said the country was currently in the midst of an energy crisis. He explained that gas import pipelines form Turkmenistan and Qatar were not feasible and added that the pipeline talks on Iran-Pakistan-India pipeline had been mishandled.

As petroleum minister, he said, he never talked about taking gas from IPI pipeline and only sought to provide security to the project against a transit fee. He said if Pakistan agreed to a higher gas price as demanded by Iran, then nobody would invest for exploration and development of huge reserves in offshore areas and Balochistan in Pakistan.

He said Pakistan’s future was in coal. Pakistan has one of the largest coal reserves but they remained untapped, he said, adding that Thar coal deposit alone worth about 370 billion barrels of oil equivalent which was far higher than Saudi Arabia’s oil reserves of 265 billion barrels.

He disagreed that Thar coal deposits were not economically feasible, reasoning that its higher carbon content was rather more suitable for gasification and power generation.

Dr Gulfraz Ahmad, who was appointed secretary petroleum by President Musharraf two days after taking power in 1999, said it was ironic that the government joined hands with oil companies, refineries and retailers to earn windfall profits arising out of international price hike and did not care for the well-being of the people or economic development.

He questioned the government claim that it was providing subsidy on petroleum products, saying that the government had, in fact, imposed double taxation in the form of PDL and sales tax. He said the government was collecting about Rs60 billion as GST on petroleum products and added that there was no sales tax on these products before 1999.