When, in the last summers, oil prices in the world market crashed due to the fall in demand in the wake of the Covid-induced lockdowns the world over as well as a price war between two oil-producing giants, the federal government announced a significant cut in the prices of all petroleum products for the month of June. This, however, led to the oil disappearing from petrol pumps. Major shortage was witnessed in the supply of motor gasoline, commonly called petrol, in many cities and towns as smaller stocks vanished within a day or two after the prices were revised downward. The oil companies, on the instructions from the authorities, had to resort to rationing to avoid a total dry-out. The supply took about a month to normalise.
On the face of it, it was a plain case of hoarding. Oil marketing companies and petrol pump owners were storing oil in anticipation of an increase in the prices later. But there was more to it, as suggested by a preliminary inquiry report which was unveiled on the orders of the Lahore High Court some time in December. According to the official report, on March 25, 2020, the petroleum ministry issued a ‘controversial’ order whereby all oil marketing companies were directed to cancel their already-booked import orders — something which simply means that the companies were stopped from benefiting from dirt cheap oil prices in the world market. The report makes it clear that the import embargo order did not have the cabinet approval — meaning that the responsibility purely lies with the petroleum ministry high-ups.
And now, the PM has had his special assistant on petroleum, Nadeem Babar, step down pending a forensic inquiry into his role and that of others in the petroleum crisis. The petroleum secretary will also remain suspended till the completion of the inquiry by the FIA. A belated decision though it is, the PM must be appreciated for his decision to go to the bottom of what caused the billions of rupees loss to the exchequer, and to get the erring and dishonest elements identified.
Published in The Express Tribune, March 30th, 2021.
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