ISLAMABAD: The Supreme Court (SC) on Thursday resumed hearing the case regarding petroleum and CNG prices and issued the interim order, declaring the current CNG pricing formula was against the law and ordered to implement the July 1, 2012 prices, Geo News reported.
A two-member bench of the apex court, comprising Chief Justice Iftikhar Muhammad Chaudhry and Justice Jawwad S Khawaja, heard the case regarding petroleum prices today.
During today’s proceedings, the court was informed that CNG price will be decreased to Rs 7-8 per kilogram with immediate effect and that the prices will be revised after six months.
The court stopped the authorities to link petroleum prices with the CNG prices as it is unjustified.
Secretary Petroleum Waqar Masood apprised the bench that the weekly notification of petroleum prices has been halted until Economic Coordination Committee’s (ECC) decision while the agreement between the government and CNG association over the operating cost has also been suspended. He further told the bench that the link between petrol and CNG prices has also been abolished.
The minister continued saying that the earlier policy to fix POL prices will be implemented now.
The chairman of Oil and Gas Regulatory Authority (OGRA) Saeed Ahmed Khan submitted a report on the formula used for fixing gas prices following the SC directives.
The report stated that owners were making Rs11 per kg profit and Rs20 per kg operating cost on CNG.
On Wednesday, the court had issued notices to the managing directors of the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL).
During the hearing, the chief justice observed that linking the price of imported petrol with the dollar is understandable but questioned the linkage of domestically produced CNG with the price of imported petrol.
Appearing on notice, Ogra Chairman Saeed Ahmed Khan submitted before the court that the tariff is determined by Ogra subsequent to the submission of a tariff petition by SNGPL and SSGCL twice a year (July and January).
The chief justice said in that case the tariff for consumers should also be determined biannually, instead of weekly. He observed that Ogra is a regulatory body and as such neither the government nor the court should influence it in its functioning.
He said there must be a mechanism under which Ogra should implement its policies as a regulator and should ensure the interests of the consumers.
The chief justice asked the Ogra chairman which factor had increased the cost of the operation that necessitated an increase in CNG prices. The court directed the Ogra chairman to submit within two hours the tariff chart from August 15 to date explaining the factors that led to an increase in the price of CNG from Rs25 to Rs92 per kilogram.
Later, the Ogra chairman returned with details of the tariff chart and said that petroleum prices are not completely deregulated as Ogra only determines the price of kerosene. He said that the per barrel cost of crude (oil) was $118.2 on August 15 or Rs77.9 per litre on August 1, 2012.
He further informed the court that the Pakistan State Oil (PSO) makes up more than 90 percent of the oil imports whereas Ogra acts as a monitor of the petrol price.
The Ogra chairman submitted that the gas price for consumers could be determined biannually, upon which the chief justice queried how the authority would compensate the consumers for the weekly rise in tariff paid so far.
Secretary Petroleum Waqar Masood informed the court that there is also a component of gas development infrastructure cess in the gas tariff while the price of petrol is determined by the bill of lading and failing determined by the international price directory.
Labels: Business, Pakistani News
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