A two-member bench, comprising Chief Justice Iftikhar Muhammad Chaudhry and Justice Jawwad S Khawaja, hearing case of CNG prices observed that the CNG associations have become cartels and the MoU was signed with the cartels.
“It seems as if not only the government created and recognised the cartels but also favoured them,” remarked Justice Jawwad S Khawaja. Justice Khawaja also said that Ogra is not subservient to government but an independent body and a watchdog to protect consumers’ interests. The Ogra only has to comply sections 7, 8 and 9 of its law and tariff rules, he added.
Hailing the step to reduce the CNG price before Eid, the chief justice said that its credit goes to Ogra and not the apex court. After the SC declared previous gas price formula unreasonable and unacceptable, Ogra (Oil and Gas Regulatory Authority) on Oct 25 had fixed CNG (Compressed Natural Gas) price at Rs61.64 per kg for Region-I (Potohar, Khyber Pakhtunkhwa and Balochistan) and Rs54.16 per kg for Region-II (Sindh and Punjab, excluding Potohar).
The court also took notice of former petroleum minister Dr Asim Hussain’s statement and sought clarification from secretary petroleum in this respect. Dr Asim had said that petroleum mafia had deferred petroleum policy under the court’s orders. Secretary Petroleum Waqar Masood told the court that a case regarding petroleum levy was pending in the Lahore High Court (LHC) as it had issued stay order one year ago.
The chief justice remarked that the court was criticised under garb of petroleum policy. He asked him to approach the High Court for early hearing, adding it is the job of Ogra to determine the prices and not that of the court. The chief justice also said that the petroleum ministry should take into account the basic constitutional rights. This matter involves rights and interest of millions of people.
The court directed SNGPL (Sui Northern Gas Pipeline Limited) Managing Director Arif Hamid and SSGPL (Sui Southern Gas Pipeline Limited) MD Azeem Iqbal Siddiqui to get the forensic audit of cost of gas per MMBTU and also assist the court on the question of price being paid by the consumers. They told that the government on 27-10-2012 has fixed gas per unit cost for SNGPL at Rs18.40 per kg and Rs16.48 for the SSGPL supplies. They said that SSGPL total production is 1,860 million cubic feet (mmcf) and SNGPL’s is 1,100 mmcf. The total demand is 4,000 mmcf and therefore the production-demand gap is 1,200 mmcf, they added.
The court also directed them to submit the report about the steps taken to control UFG (unaccounted for gas) as this faction governs in fixation of CNG price and the consumers had to bear the brunt of the gas losses. Justice Jawwad asked them to also inform the court about the international losses standard, adding; “Whether we are deviating from this standard and (if we do, then) why?” The chief justice pointed out that total production of gas in Pakistan is over 4,300 but the consumption is 3,500 mmcf.
Some CNG stations’ owners and Sindh CNG Association impleaded party in the case, which the court accepted. Abdul Hafeez Pirzada on behalf of CNG stations’ owners and Wasim Sajjad representing Sindh CNG Association filed replies. Wasim prayed that the government should be directed not to adopt coercive measures against the CNG stations.
The chief justice said: “We want that the government function independently and establish its writ.” However, the government cannot impose taxes for which no approval has been given because doing so is exploitation to some extent, the court added. The court, on the request of CNG stations owners’ counsel, adjourned the hearing until November 19, 2012.
SC orders no change in CNG price