Government to Take Action Against 9 OMCs

Prime Minister Imran Khan has ordered action against 9 oil market companies (OMCs) including cancellation of their licenses and the arrest of their officials after an inquiry body found them involved in deliberately creating a petrol shortage in the country by hoarding the fuel, according to a report by The Express Tribune.

The fuel crisis committee, formed earlier this month submitted its preliminary report to the Prime Minister in the wake of petrol becoming unavailable at filling stations across the country after the government slashed its price. According to The Express Tribune, the 8-member body has blamed 9 OMCs for the crisis including Shell Pakistan, Total Parco Pakistan, Attock Petroleum, Attock Oil Pakistan, Byco, Gas and Oil Pakistan, Hascol Petroleum, Puma Energy and Be Energy (formerly Bakri Energy).

Related: OCAC Blames Bureaucracy for Fuel Shortage

The committee said it had visited the oil depots of these OMCs and found that they had excess stocks of petrol. It recommended strict action against the OMCs including cancellation and suspension of their licenses for hoarding and black marketing of the fuel.

The Prime Minister said the companies responsible for the crisis would not be spared. The OMCs will be issued notices seeking an explanation for the artificial shortage. It will be mandatory for them to maintain stocks for 21 days. The licenses of the OMCs involved in the crisis will be cancelled or suspended if the fuel supply situation does not improve within a month.

On June 11, the committee had sought registration of cases against the heads of two major OMCs for hoarding and black marketing of petrol after inspecting their terminals at Karachi’s Keamari Port. It also submitted an application to the assistant commissioner of the Sub-Division Harbour of Karachi’s West district, seeking registration of FIRs against them.

Many OMCs, who had pocketed billions of rupees in the past following increase in petroleum product prices, have tried to stave off inventory losses by curtailing supplies to retail outlets and shifting the entire supply burden to state-run Pakistan State Oil (PSO).

Related: OGRA Penalizes 6 OMCs for Petroleum Shortages

Oil and Gas Regulatory Authority (OGRA) recently slapped a cumulative fine of Rs 40 million on 6 OMCs for hoarding and black-marketing. However, the fine looks like just peanuts as OMCs have saved billions of rupees by restricting supplies to retail outlets.

The entire burden of fuel supply fell on PSO, which suffered a loss of billions of rupees in June because its market share widened sharply in an effort to tackle fuel shortage. However, the market share of other OMCs contracted during the fuel crisis.

Separately, the Islamabad High Court issued notices to the energy ministry, OGRA, the fuel crisis committee and the Federal Investigation Agency (FIA) on a petition filed by an oil company against the ongoing crackdown on the OMCs allegedly responsible for the fuel crisis.

Related: Government Blame Mafias for Creating another Crisis

IHC Chief Justice Athar Minallah while hearing the plea observed that the fuel crisis committee was supposed to issue notices to the OMCs. Instead they were issued by the FIA. He noted that the court displayed patience when it came to the affairs of the executive. He questioned as to how would OGRA and the FIA they pursue the case later if they were already part of the committee.

The lawyer for the OMC contended that a federal minister could not form a committee to probe into matter under the OGRA ordinance. He added that the inclusion of the FIA in the committee was aimed at harassing the OMCs. He further argued that presence of PSO in the committee also created a conflict of interest. The court adjourned the hearing till 25th June.

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