Senate Petroleum Committee seeks performance audit reports of oil rigs within a week

ISLAMABAD: Federal Minister for Petroleum Ali Pervaiz Malik on Thursday stated that it is the responsibility of the regulator to bring all stakeholders together and make decisions regarding petroleum product prices, as the government has delegated pricing authority to the Oil and Gas Regulatory Authority (OGRA).
Briefing the Senate Standing Committee on Petroleum, the minister said that the pricing mechanism and the index used for determining petroleum prices are publicly available on OGRA’s website. He added that, on the directive of the Prime Minister, the mechanism would also be published in Urdu to enhance transparency.
He explained that petroleum prices are determined using a seven-day rolling average of international benchmarks, with petrol and diesel prices derived from Platts, to which government taxes and company margins are added.
The minister noted that transparency in the system would further improve once the OGRA chairman provides a detailed briefing.
However, members of the committee raised concerns over the recently introduced daily pricing mechanism. Senator Saifullah Abro termed it a “slow poison,” while Senator Amir Waliuddin Chishti stressed that middlemen should not be allowed to exploit the system for undue profits.
Chairman OGRA informed the committee that the daily pricing mechanism is based on a seven-day rolling average, which helps cushion consumers against abrupt international price fluctuations, particularly in the context of ongoing geopolitical tensions such as the US-Iran conflict. He said that if international prices drop or rise sharply, the impact is spread over seven days, thereby minimizing sudden shocks.
Senator Jan Muhammad observed that the common man is unable to understand the pricing mechanism, adding that the situation has created a psychological dilemma in society.
During the meeting, confusion arose over briefing papers, with Senator Abro criticizing the OGRA chairman, remarking that he appeared to have been brought from “another planet.”
The committee also expressed concern over the absence of the Managing Director of Pakistan Refinery Limited (PRL). The chairman warned that a privilege motion could be moved against the MD for failing to attend the meeting or respond to calls. Senator Qurat-ul-Ain Marri pointed out that while private sector representatives attended in person, a government entity was represented only online.
Officials from the Petroleum Division informed the committee that the PRL Company Secretary was available online.
The committee further expressed dissatisfaction over the failure of Sui Southern Gas Company (SSGC) to implement previous directives, provide details of its Board of Directors, and issue an apology over remarks discouraging the committee from discussing certain matters. The committee considered moving a privilege motion against SSGC as well.
The Petroleum Division was directed to submit complete details of the Boards of Directors and senior management of all state-owned petroleum companies, and to review the tenure of board members serving beyond the prescribed period.
The committee also took notice of the absence of performance audits of oil rigs and directed authorities to submit the audit report within seven days. Issues relating to LPG quotas and licensing were also reviewed, with OGRA directed to convene a meeting of stakeholders and submit a detailed report.
Earlier, the minister informed the committee that the process for appointing a permanent OGRA chairman had been initiated in time, but no suitable candidate was found after interviews. He added that the process has now been restarted.
The Senate Standing Committee on Petroleum, chaired by Senator Umer Farooq, met at Parliament House to review the daily petroleum pricing mechanism, criteria for appointments of heads of state-owned petroleum companies, composition of their boards, and implementation status of previous recommendations.
The meeting was attended by Senators Qurat-ul-Ain Marri, Saifullah Abro, Abdul Wassy, Rana Mahmood Ul Hassan, Saadia Abbasi, Hidayatullah Khan and Amir Waliuddin Chishti, while Senator Jan Muhammad participated as a special invitee.