Fleecing masses for energy cost

ISLAMABAD - PPP-led fragile coalition government, ever since it took over after the February 18 elections, has been overloading the consumers of petroleum products' skyrocketing prices in a blindfold manner following the prescription of international financial institutions.

Latest increase of over 14 per cent in the prices of the petroleum products last week was the highest ever hike in the price of oil and gas sector in the history of the country. It was still not the end of the story. The government in the light of various reports and statements has already been trying to indicate that it had to pay billions of rupees to the oil marketing companies as differential of the international and the domestic prices of the petroleum products. According to the reports, the government has still to pay Rs 72 billion to the Oil Marketing Companies under the head of the differential or as the cost of capping the prices against the international oil's hike. That clearly indicates the government's intentions to further increase the prices of the petroleum products.

That gives the bottom line that further increase in the prices of the petroleum products was looming large in the days ahead. So far the impact of the previous raises is yet to settle between the various stakeholders of the energy sector. In the absence of any effective regulatory body for the chaotic energy market in the country the masses are left at the mercy of cruel market mechanisms and that too sans any regulation. The Oil and Gas Regulatory Authority (OGRA) being a toothless watchdog against the ruthless mafia of the oil marketing and intermediaries, means nothing more than rubber stamp.

Like the former government, the incumbent governance by the PPP also keeps the OGRA as a dormant regulator, which is required to notify the decisions of the government regarding the increase in the oil and gas prices. Since the PPP leadership is preoccupied with the political perplexity of the judges' issue being still pending, and an overwhelming pressure of the US to do more in the war on terror, it lacks the capacity to handle the issue of alarmingly rising prices of the petroleum products.

Insiders have confided to TheNation that for want of maximum possible revenue generation from the oil and gas sector for the government, it has been misstating the actual size of taxation on the petroleum prices. The so-called pro-people government has also failed to check the efficiency level at the state-owned energy outfits including petroleum and the power generation sector. To start with, it has been concealing the size of the inter-corporate or circular debt amounting to hundreds of billions of rupees questioning the financial efficiency of all the state-owned utilities and companies in the energy sector.

Secondly, it has paid no attention to the so-called line losses of the Water and Development Authority (WAPDA), enjoying the power sector monopoly in the country. Officially it has stated that the Wapda's line losses hover around 30 per cent. On the other hand, Water and Power Minister Raja Pervez Ashraf once asked in this regard spontaneously responded by saying that he believed that the line losses were at 40 per cent.

Similarly, in complete disregard of the impotent OGRA's directions, the unaccounted for gas (UFG) has gone up from previous level of 6.5 per cent or to plus seven per cent. All these line losses and the UFG are charged on the consumers in blatantly unfair manner. While in the prevalent state of realpolitik no one is there to maintain checks and balances amongst various pillars of the state. Therefore, the government enjoys a free hand in fleecing the consumers in the name of price hike or taxation.