The Supreme Court on Friday announced its reserved judgment in the compressed natural gas (CNG) pricing case, directing the Oil and Gas Regulatory Authority (OGRA) to discharge its obligation in accordance with the law and come up with a consumer-friendly pricing formula in a swift manner. A two-judge bench of Justices Jawwad S Khawaja and Khilji Arif Hussain ordered that the current CNG price would remain in effect until a new pricing formula was devised by OGRA. In its short order, the court observed that a blatant assault on the fundamental rights of the people and their exploitation in violation of articles three and five of the constitution could not be allowed to continue. The court noted that OGRA was supposed to protect public interest and its failure to protect ordinary consumers from oligopolistic and monopolistic activities could not be condoned. “Whatever its state of affairs in the past may have been, OGRA is once again directed to discharge its duty in a legal and fair manner,” the judgment said.
The bench held OGRA responsible for inflated CNG prices and observed that the authority failed to protect consumer rights through collusion between the government, CNG station owners and OGRA. The verdict was issued on identical petitions filed by Iqbal Zafar Jhagra, Senator Rukhsana Zuberi and an application filed by Sanaullah Bhutta. “There is no denying the fact that CNG prices have indeed increased over the last few years. According to figures provided by the petroleum secretary, CNG was being sold in Pakistan at Rs 33 per kg in August 2008. Only four years later in September 2012, it is being sold at Rs 95 per kg – almost three times the original price,” the judgment observed. The petitioners raised a number of issues on the pricing of petroleum and natural gas, which had a direct bearing on fundamental rights as it overburdened the common man. The petitioners contended that the price at which CNG was being sold was not in accordance with the law.
The bench noted that various items in the present formula appeared to have been arbitrary and not in accordance with the law and without any reference to accounts of CNG stations. It said several additional charges were being carried on CNG prices. “We reviewed the CNG prices on October 25. Responsibility for fixation of prices rests with OGRA, however, it is binding on it to keep into consideration guidelines spelt out by the government. Protection of the rights of consumers is also an obligation of OGRA.”
“The operating cost of CNG stations was admittedly calculated per the MoU signed between CNG Association and federal government. Upon examination, the MoU held on August 25, 2008 had been entered into by the government of Pakistan and the All Pakistan CNG Association, CNG Dealers Association and CNG station owners. This MoU purported to fix the price of CNG in the entire country for a certain period and was subject to revision, through identical consultative process between the parties on bi-annual basis,” the short order noted. It added that fixing the CNG sale price in this manner was a clear violation of law and OGRA, which bore the primary responsibility in this regard, was not a party to the MoU. The order noted that instead of intervening to protect public interest, OGRA simply chose to enforce the MoU that was a “blatant abandonment of its duties and abdication of its statutory role as protector of the interests of the citizens who have to bear the brunt of the unjustifiable prices”.
The court further observed, “We note with great regret that throughout these hearings on issues of the greatest public importance, the approach of the executive authority which shares with OGRA the responsibility for sorting out this matter of highest significance, has not been helpful. The questions relating to UFG losses and other issues raised in the constitution petitions would be considered at the next hearing,” the order concluded. Talking to reporters outside the Supreme Court later, OGRA Chairman Dr Saeed Ahmed said the SC decision had come and we would endeavour to announce new prices of CNG within 24 to 48 hours. “The SC has said OGRA is a sovereign authority and it is not bound to comply with the decision of government strictly. We will soon implement SC orders and our institution is transparent and fair,” he added. All Pakistan CNG Association chairman Ghayas Paracha said the CNG pricing case was pending before the court for last several days, but the Ministry of Petroleum could not present even a single policy before the court. “We have not given any bribe. The apex court kept on saying during the last four hearings that CNG prices should be set, but the ministry did not comply with the orders. OGRA should pay attention to the matter and make announcement to the public so that no negative notion brews up in any mind.”
