Faulty pricing mechanism filling oil-marketing companies' pockets
ARIF RANA
ISLAMABAD (December 04 2006): It is the faulty oil pricing mechanism that makes Pakistan an ideal place for oil marketing companies, which are fleecing customers and thriving their businesses without any fear and accountability. It's the only country in the world where oil pricing was left at oil-marketing companies' mercy for years and the new system was sugar coated as deregulated regime.
Pakistan's case is also unique in a sense that here a group of four - the government, oil marketing companies, dealers and retailers was being protected through a proportionate formula in fixing oil prices.
As per proportionate formula, the government, oil marketing companies, dealers and retailers get more money as long as oil prices remain on higher side. Higher profit/ margin is understandable when prices touch high level in the international market, but how one can get more tax or commission when the prices go down.
The pricing mechanism surprisingly safeguards the interests of oil marketing companies and totally ignores the consumers' interests.
High oil prices leaves the consumers screaming under an unbearable burden, which becomes more painful when the government announces that oil prices would be lowered as long as the government meets taxes target.
Sources said proportionate formula is focal point of the National Accountability Bureau (NAB) into oil pricing scam.
The investigators had questioned the officials who they believe were instrumental in introducing the proportionate formula for oil pricing at different stages. Sources said the NAB investigators are near to the conclusion of investigations, which established that the policy of fixing oil prices by oil marketing companies was meant to give them undue benefit.
NAB authorities have questioned a number of senior officials who hold key position in the Petroleum ministry since 2002 and now they are in the processing of identifying the role of each of them to establish that deregulation in oil pricing was actually meant for vested interests.
Sources said NAB chief will present the report of oil scam to President General Pervez Musharraf to seek his permission to take action against at least four senior officials who were believed to make money in deregulated regime and intentionally put in place a flawed system for fixing of oil prices.
Copyright Business Recorder, 2006