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Event Title: Senate Standing Committee on Petroleum

Event Date: 2019-05-21

Senate Standing Committee on Petroleum in its meeting on Tuesday discussed the issue of smuggling of petroleum products in the country with particular reference through Pak-Iran border in Balochistan, the loss of annual revenue and the action taken by the concerned departments to stop the same. The Committee was told by PSO that there are no figures with the company as to how much petroleum products are being smuggled through the Pak-Iran border. Members of the Committee noted that the issue of smuggling needs to be curbed but the ground realities of poverty and employment woes also need to be considered while it was also the opinion of some members that it is the duty of the state to protect its revenue and curb all smuggling attempts.

The Committee was told by IG FC Southern Balochistan that in 2042 thousand kilometres area, there are four major roads and there is no government owned petrol pump on the four roads in the area and the porous terrain makes it difficult for custom and FC to check all vehicles. He said that the matter of curbing smuggling is primarily under the customs department and that department needs to be strengthened and FC will provide all the support needed. 8 million litres of illegal oil has been apprehended since last year by FC. Fall out of these actions are raised public sentiments against the FC because they are poor people and do not have any other sources of income than such transportation of petroleum products.

The Committee chairman observed that either the argument can be floated that because of the economic underdevelopment of the Balochistan province we should close our eyes to the smuggling or we should be wary of the huge revenue loss this smuggling is causing us.

The Committee recommended enhancing the capacity and human resource of Custom border task force as well as Frontier Constabulary so that the menace of smuggling of petroleum products can be put to an end. At the same time the Committee noted that people belonging to low income groups who do not have any other source of income should not suffer due to this due to economic underdevelopment.

A briefing on the reintroduction of 80-82 Ron Petrol especially for Motorcycle commuters for provision of relief in price to them was also given. The 80-82 Ron Petrol will be 10-12 rupees cheaper than the 90 -92 Ron petrol currently in use. Chairperson OGRA made it clear in the meeting that the proposal has been floated in personal capacity and does not have ownership or blessing of OGRA. Stakeholders of the motorcycle industry, oil refineries and PSO also attended the meeting and expressed reservations on changing from 92 to 82 Ron. The matter was referred to the ministry of energy and petroleum division to invite stakeholders and work on the feasibility of the proposal.

The Committee sought implementation status of its earlier direction that the policy of deemed duty should not be for indefinite period to protect the interests of the refineries as well as those of the consumers. The Committee was told that the deemed duty is to protect and support the industry and not to upgrade it. The ministry told the committee that draft of the new oil refinery policy will be shared with the committee after Eid and will also include a detailed briefing on this matter.

The Committee was told regarding the matter of reconciliation of petroleum development levy by PSO that the levy is already reconciled and PS has deposited it.