Bhagwandas Report – Oil companies given free-hand to fix Oil Prices

Many in Pakistan may have already glanced through this front page story in Dawn, I feel this is a very valuable piece of information to keep in mind when we try to understand the oil-scam in Pakistan.

In 2001 an Oil Companies Advisory Commission comprising of all oil companies in Pakistan under the watchful eye of DG (Oil) showed up only three times of the 114 meetings held from 2001-2006. The DG (Oil) was entrusted with the responsibility to manage, ensure and monitor the demand and supply of petroleum products throughout the country but due to negligence the ministry used to faithfully accept and notify whatever calculations were done by OCAC. The 74-page Bhangwandas report noted that since members of the OCAC were direct beneficiaries of oil business and, therefore, could not be expected to perform their functions in isolation of their self-interest. “It would be highly inconceivable to expect that persons having direct interest in the outcome of an exercise would be oblivious of their personal interest and act freely and independently in the larger consumer interest’

Its interesting that the Ministry left all the decision making at the wisdom of the stake holders themselves accepting their decisions which naturally must have ensured profitability outweighing Pakistani-consumer interest. I believe the more we hack away at this issue we will slowly continue to stumble across larger gaping holes in how these oil companies may have minted millions from the fluctuating international prices with little respite to the local consumer through the entire roller coaster from $145 a barrel to $60 a barrel now. [REQ: to better understand the trends of Pakistani oil prices I would like to issue an open request if someone can share a graphic displaying the price fluctuation of international crude oil prices vs the Pakistani local price]