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PAC sets up committee to check rising oil theft in PSO

ISLAMABAD: Sub-Committee of Public Accounts Committee (PAC) on Monitoring and Implementation on Friday expressed serious concern over rising oil theft in Pakistan State Oil (PSO) during transportation from one depot to another.
The Committee showed concerns over the calibrating system adopted by PSO to measure the petroleum products from one depot to another depot. To bring improvement in the system, the Committee set up a committee to give recommendations for its improvement.
Rana Afzaal Hussain was convener at the meeting. The Committee reviewed the audit reports of PSO and also examined the performance audit of Ministry of Petroleum and Natural Resources.
Rana Afzaal said there was no monitoring mechanism to stop theft of oil during transportation. Despite, management of PSO’s strict measures still oil is being theft during calibration and later available in black market on lower price.
He said before the case would be handed over to Federal Investigating Agency for investigation, it would be better to set up a committee of the Ministry to recommend how to make entire system transparent.
Secretary Petroleum admitted the loopholes from whole system of transportation and calibration should be plugged.
Member Committee Mian Abdul Manan asked how they calculated losses during transportation of fuel from one point to another.
The PSO official said they followed international standard based on temperature at the time of transportation of fuel. However, he failed to respond Mian Manan’s question where they adjust these losses. 
The Committee reviewed a performance report on transportation of petroleum products to Northern areas and Gilgit. The performance audit was conducted after Chaudhry Nisar Ali Khan, a member of PAC in 1996 apprehended loaded oil tankers of the oil companies were decanted at Rawalpindi by the carriage contractors and petroleum products were not actually transported to Northern areas while carriage was obtained them. He opined about Rs 50 million were paid annually on this account.
At that time, PAC directed to conduct performance audit of transportation of petroleum products to Northern areas for the period 1990-95 and submit report.
The report presented on Thursday based on the data for the period 1990-95 of PSO depot, Juglot. However, the report pertaining to PSO depot, Faqirabad is based on the data for the period 1992-95 only due to non- availability of record for the year 1990-91 and 1991-92.
The performance audit report on transportation of POL products to Northern areas was discussed in a DAC meeting held in 2002. Despite being constrained by provision of incomplete record the audit findings validated the concerns raised in the PAC meeting in which direction of audit review was issued. In DAC meeting it was observed the basic issue of payment of freight charges to carriage contractors without the assurance that products actually reach the sale point in Northern areas continued to be risk area.
In one audit observation, as per record of PSO depot, Faqirabad the petroleum products dispatched to six filling stations located in Diamer District and freight paid during the period 1992-95. The freight of Rs 46 million was paid in excess. Petroleum products dispatched as per record of freight pool, PSO House Karachi and PSO depot Faqirabad to Hakeem filling station, Chillas and Muhammad Gul Kaka filling station, Shtial during the period 1992-95 were compared. The comparison showed freight of petroleum products for 426,000 litres and 259,000 litres was paid in excess to Hakeem filling station, Chillas and Muhammad Gul Kaka Filling Station Shatial respectively.
The audit observed bills and claims for 1999 showed this system was in vogue at the time of audit. Valid record was also missing of the periods under discussions.
In last DAC meeting held in July 2014, the Ministry stated the record available was provided to audit while which was not available could not be provided. Audit was of the opinion record pertained to the audit report, which was carried out on the orders of the then Petroleum Minister Ch Nisar Ali Khan. The record could, therefore neither be destroyed nor misplaced. It should therefore be made available.
Director General Oil Ministry of Petroleum Muhammad Azam said Oil and Gas Regulatory Authority now developed a mechanism to determine the freight charges across the country. Now, they also put trackers on transports carrying fuel to Juglot.

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