ISLAMABAD: In view of the Supreme Court hearing cases of corruption in the gas sector, the Oil and Gas Regulatory Authority (Ogra) has withdrawn a controversial order which allowed a revenue of tens of billions of rupees to a private gas firm and promised four other to draw a follow-up windfall.

The de-notification of Ogra’s order will save about Rs26 billion to the public exchequer which was to be paid to Dewan Petroleum, but stopped by the Lahore High Court and then by the Supreme Court.

Early this week while hearing cases of corruption in Ogra during the tenure of former chairman Tauqir Sadiq appointed by the current government, the apex court asked the National Accountability Bureau whether the authority had withdrawn the order and if not why action should not be taken against NAB and Ogra authorities.

NAB swung into action immediately and wrote a strongly-worded letter to the Ogra chairman for not withdrawing the controversial order and said it could lead to contempt of court cases against both NAB and Ogra.

Acting upon the letter, Ogra Chairman Saeed Ahmad Khan called an emergency meeting and decided to rescind the order of Feb 17 last year.

“The authority is pleased to withdraw its earlier notification of Feb 17, 2011 from the date of its notification and provisionally determine and notify the wellhead gas price of dehydrated gas sold by M/S Dewan Petroleum Limited to SNGPL at the agreed delivery point, from Salsabil (Rodho) field at $2.8274 per MMBTU for the period effective July 1, 2010 to December 2010”, said a notification issued on Friday.

Former Ogra chief Sadiq had issued a notification on Feb 17, 2011 to allow Dewan Petroleum a gas price of $3.9 per mmbtu (million British Thermal Units) even though the Lahore High Court had ordered the same day that a status quo should be maintained, giving an impression that it had been issued before the LHC’s order.

Had that notification been implemented, four other gas fields, including some at Tal block and Latif block, would have got a similar pricing, causing huge losses to the federal government and eventually to consumers.

The ministry of petroleum challenged the Feb 17 order in the LHC and succeeded in getting the payments of $3.9 per MBTU price stopped and kept on paying about $2.83 per MMBTU in line with the petroleum policy.

The Supreme Court had in October last year set aside the Ogra’s notification and directed the federal government and Dewan Petroleum to resolve the dispute through arbitration. Ogra, however, did not formally withdraw the notification.

When Tauqir Sadiq, the main accused in the case, was absconding, Mansoor Muzaffar, Ogra member gas and another signatory to the controversial notification had been in NAB custody for months pending investigation into gas theft, gas pricing and other cases.

Expressing annoyance over NAB’s failure to make arrests and recover public money, the apex court fixed the next hearing on Aug 13 for Ogra and NAB to submit a compliance report relating to the Dewan Petroleum case.

NAB had informed the court about over Rs83 billion losses caused to the exchequer and the general public because of gas pricing, theft and the setting up of illegal CNG stations.

According to NAB’s progress report submitted to the court, the arrested Ogra member, Mansoor Muzaffar Ali, had “made serious revelations, particularly concerning pricing mechanism of Dewan Petroleum, raising of unaccounted-for gas (gas losses) benchmark, injunctions passed in gas theft cases and connivance of other Ogra executives and private persons”.

The report said that Tauqir Sadiq had been absconding since May 16 and the process of freezing his known assets and those of other accused and ‘benamidars’ was under way for the recovery of money. “So far, 40 bank accounts of the accused persons have been placed under caution. Simultaneously, a reference under National Accountability Ordinance, 1999, is also under preparation.”

It said the allegation about misuse of authority in the case of increase in the well-head price of Dewan Petroleum’s Salsabil field had been established, yet loss to the exchequer did not occur since disbursement of money never took place.