IN THE SUPREME COURT OF PAKISTAN 
(Appellate Jurisdiction) 
 
 
 
PRESENT: 
 
MR. JUSTICE JAWWAD S. KHAWAJA 
 
MR. JUSTICE KHILJI ARIF HUSSAIN 
 
 
Const. Petitions Nos. 33 & 34 of 2005 & HRC No. 5332/2006 & 
CMA No.4567/2012. 
 
 
Engineer Iqbal Zafar Jhagra.  
 
 
… Petitioner (Const. P.33/05) 
Senator Rukhsana Zuberi. 
 
 
 
… Petitioner (Const. P.34/05) 
Appliction by Sannaullah Bhutta. 
 
 
… Petitioner (HRC 5332/06) 
 
VERSUS 
Federation of Pakistan etc. 
 
 
 
… Respondents 
… 
 
For the Petitioners: 
 
 
Mr. Ikram Chaudhry, ASC 
 
 
 
 
 
Nemo 
 
For applicants: 
 
 
Miangul Hassan Aurangzeb, ASC 
 
 
 
 
 
Mr. M.S. Khattak, AOR (In CMAs 4544-4545/12) 
 
 
 
 
 
 
Mr. Waseem Sajjad, Sr. ASC 
 
 
 
 
 
Mr. Mehr Khan Malik, AOR (In CMA 4567/12) 
 
 
 
 
 
 
Mr. M. Asif Chaudhry, ASC 
 
 
 
 
 
Mr. M. S. Khattka, AOR (In CMA 4707/12) 
 
 
 
 
 
 
Ch. Akhtar Ali, AOR (In CMAs 4760-61/12) 
 
In CMA No.5288/12  
 
Hafiz Muhammad Idrees, ASC 
 
In CMA No. 4765/12:  
 
Zulfiqar Ali (in person) 
 
For CNG Association Station Owners: Mr. Giyas Paracha, President & 
Khalid Rashid.  
 
For the Respondents:  
 
Mr. Asim Mansoor Khan, ASC 
 
 
 
 
 
Raja Abdul Ghafoor, AOR 
 
 
 
 
 
Mr. Waqar Masood, Secy. Petroleum. 
 
For the Federation: 
 
 
Mr. Dil Muhamad Khan Ali Zai, DAG 
 
For NAB: 
 
 
 
Mr. Fawzi Zafar, (Addl. P.G.), NAB 
 
For FBR: 
 
 
 
Malik Shakil-ur-Rehman, ASC 
 
For OGRA: 
 
 
 
Mr. Salman Akram Raja, ASC 
 
 
 
 
 
Malik Ghulam Sabir, Advocate 
 
 
 
 
 
Mr. Mahmood A. Sheikh, AOR 
 
 
 
 
 
Mr. Saeed Ahmed Khan, Chairman 
 
 
 
 
 
Ms. Misbah Yaqoob, JED (F) 
 
 
 
 
 
Syed Faisal Ishtiaq, LO 
 
 
 
 
 
Mr. Iltaf Hussain, DED(F) 
 
 
 
 
 
Mr. Abdul Basit Qureshi, SLO 
Const. Petitions 33 & 34 of 2005 
2 
 
For SNGPL & SSGC:  
 
Mr. Abid Hasan Minto, Sr. ASC 
 
 
 
 
 
Mr. Asim Iqbal, ASC 
 
 
 
 
 
Mr. Mahmood A. Sheikh, AOR with 
 
 
 
 
 
Mr. Arif Hameed, MD, SNGPL 
 
 
 
 
 
Mr. Shoaib Warsi, SGM (D) SSGC 
 
 
 
 
 
Mr. Faisal Iqbal GMF, SNGPL 
 
 
 
 
 
Mr. Aamir Nasim, SGMD) 
 
Date of Hearing: 
 
 
20.12.2012 
… 
ORDER 
 
Jawwad S. Khawaja, J. These two constitutional petitions (C.P 33 of 2005 and C.P 34 
of 2005) have been filed by Engr. Iqbal Zafar Jhagra and Senator Rukhsana Zuberi. The 
petitioners have raised a number of issues about the pricing of petrol and natural gas which 
have a direct bearing with the enforcement of the fundamental rights of the people of 
Pakistan who have to bear the brunt of such prices. 
2. 
Amongst other things, the petitioners allege that the price at which Compressed 
Natural Gas (CNG) is being sold to vehicle owners is not being determined in accordance 
with the law and is therefore inflated. There is no denying the fact that CNG prices have 
indeed increased over the last few years. According to figures provided by the Secretary, 
Ministry of Petroleum, in August 2008, CNG was being sold in Pakistan at the rate of Rs. 33 
per kg. Only four years later, in September 2012, it was being sold at Rs. 95 per kg – almost 
three time the original prices. The number of citizens affected by this increase is also very 
large. According to figures provided by the Oil and Gas Regulatory Authority (OGRA), no 
less than 3395 licenses for CNG marketing have been granted. The number of users of CNG 
whether direct, or as poor commuters traveling on the roofs of buses, who depend on public 
transport is estimated to run into millions, and around 12% of the total gas in the national 
transmission system is devoted to the CNG sector.  
3. 
While the petitioners have raised a number of issues, in the present order, we 
confine ourselves to only one: the pricing process for CNG. The Court did hear some 
arguments about the issue of pricing process of natural gas sold directly to consumers by 
SSGC and SNGPL and the impact of unaccounted for natural gas (UFG) losses on its 
determination. However, Mr. Abid Hasan Minto, Sr. ASC, learned counsel for SSGC and 
SNGPL apprised the Court that the same issue was moot in writs filed before the High 
Courts of Sindh and Lahore. In the latter court, arguments have been concluded and the 
determining the sale price of CNG for consumers falls on OGRA. Rule 13 of the Compressed 
Const. Petitions 33 & 34 of 2005 
3 
judgment is presently reserved. Mr. Minto therefore, requested that consideration of the 
issue relating to UFG losses be postponed to a date till at least one of the High Courts has 
pronounced its judgment. This suggestion has been made to enable all concerned to 
examine the reasoning which prevailed with the High Court. The suggestion being 
reasonable, we confine ourselves to the issue of CNG pricing, leaving the rest of issues for 
subsequent hearings. 
4. 
It is clear from a review of the relevant laws that the primary responsibility for 
Natural Gas (Production and Marketing Rules), 1992 states that: “The Authority [OGRA] shall 
determine and notify the sale price in accordance with the policy guidelines issued by the Federal 
Government, from time to time. (2) No license[e] shall charge price from its consumer which is higher 
than the sale price notified by the Authority, [OGRA] from time to time.”  
5. 
It is correct, therefore, that the policy guidelines issued by the Federal Government 
are to be given consideration by OGRA. Section 21 of the OGRA Ordinance also states in 
similar vein that “… the Authority [OGRA] shall comply with the policy guidelines [issued by the 
Federal Government]…” If read out of context, these provisions could create the impression 
that in matters such as price determination, the Federal Government enjoys co-extensive 
powers with OGRA; or that, at least, its policy guidelines trump any other considerations 
which OGRA may have before it. However, this reading of the text runs against the overall 
scheme and text of the OGRA Ordinance. Policy guidelines are exactly what they purport to 
be i.e. guidelines at most. The statute envisages that the regulatory functions are to be 
performed by an Authority which is “independent in the performance of its functions”, (S. 3(2)). 
This independence is actualized by laying down stringent objective appointment criteria of 
“eminent professionals of known integrity and  competence” for key decision-makers (Section 3), 
vesting them with security of tenure (S. 3(8) and S. 5) and funding OGRA through its own 
statutory fund (S. 18). Clearly, all of these measures were taken by the legislature to provide 
OGRA with a strong measure of independence from the Federal Government. The measures 
would be rendered entirely superfluous if we construe Section 21 of the Ordinance and Rule 
14 in a manner which makes OGRA bound by the directives of the Federal Government. 
Since, the general principle of statutory interpretation is that the language of the legislature 
must not be rendered superfluous, we take it that that Section 21 and Rule 14 imply only 
Const. Petitions 33 & 34 of 2005 
4 
that OGRA must include the policy guidelines of the Federal Government in its 
consideration and decision-making process; it is not, however, bound by the same. That the 
legislature chose the term “policy guideline” instead of  “directive” or “order”, corroborates 
this interpretation. We may also add that one of the principal raisons d’etre of OGRA as 
clearly spelled out in its statute is the protection of the consumer who ultimately is to bear 
the price of CNG.      
6. 
Accordingly, we consider OGRA the primary bearer of regulatory power and have 
examined its exercise of this power. In our order dated 25.10.2012, we examined the break-
up of CNG retail price submitted by OGRA. The same is also reproduced as under:- 
CNG CONSUMER PRICE DETAILED BREAK UP. 
 
 S r # 
Components 
Price w.e.f.22.10.2012 
              Region-I 
 
Rs./Kg       Rs.MMBtu      % 
Price w.e.f.22.10.2012 
              Region-II 
 
Rs./Kg  Rs.MMBtu      % 
A. 
 
 
B. 
 
C. 
 
D. 
Average Well head 
price/cost of gas paid to 
exploration  companies* 
Operating Cost of Gas 
Companies 
 
Return on investment to 
gas companies Other 
incomes (net of Prior year 
 adjustment, if any, etc.) 
 
 
18.04             358.87          92% 
 
1.14               22.69             6% 
0.872             17.34             4% 
                  
-0.53             -10.63            -3% 
16.48        358.87            92% 
 
1.04            22.69              6% 
0.796          17.34               4% 
 
-0.49          -10.63             -3% 
E=A 
to D 
Average Prescribed price 
of natural gas 
19.51           388.27          100% 
17.83       388.26           100% 
F 
Sale Price of natural gas 
for CNG stations as 
advised by Federal Govt. 
under section 8(3) of 
OGRA,Ordinance 
including GDS/cross 
subsidization.  
 
 
35.19             700.32          38% 
 
 
32.14      700.02              38% 
G. 
**Operating Cost of CNG 
Stations 
20.80             113.80          22% 
20.80      453.01              25% 
H 
Profit of CNG Station 
Owners. 
11.19              222.60         12% 
10.59         230.61           13% 
I. 
GIDC 
13.25              263.57        14%   9.18            200.00           11% 
J 
GST (25% of Price F+1) 
12.10               240.69       13% 
10.33            225.00         12% 
K 
Differential Margin for 
Region –II 
--- 
1.50               32.67            2% 
Const. Petitions 33 & 34 of 2005 
5 
 
Total CNG Consumer 
Price (F-K) 
92.53          1,840.98       100% 
84.54    1,841.31           100% 
            Petrol Price (Rs./Ltr)      102.08            3.069               102.08    3.069 
*Well head price (cost of gas price) as per GPAS for Sui & Kandhkot is attached for illustration (copy 
annexed) 
**Operating Cost includes compression cost, maintenance, depreciation, fee etc as per MoU signed b/w 
CNG Association & FG. 
                      CNG Price         
 
 
Petrol Price  
 
 
7. 
We have concluded that various items in this formula appear to have been 
determined arbitrarily and not in accordance with law and without any reference to the 
accounts of CNG stations. The operating cost of CNG Stations was, for instance, admittedly 
calculated “as per MoU signed b/w CNG Association & [Federal Government]. Upon 
examination, it turned out that the said Memorandum of Understanding dated 25th August, 
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 whole country for a certain period and was “subject to revision, 
through identical consultative process between the parties, on bi-annual basis…” (clause e, MoU). 
Fixing the sale price of CNG in this manner represents a clear violation of the law. OGRA, 
which bears the primary responsibility in this area, was not even a party to the MoU. Yet, 
instead of intervening to protect the public interest, it simply chose to enforce the MoU. This 
constitutes 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 unjustifiable prices. 
Essentially, this represents one of those sad episodes of our history where the cartel of 
suppliers, the government and the regulator came together to enact a grand exploitation of 
the poorest and most helpless amongst the country’s citizens.  
8. 
Taking notice of this situation, in our order dated 25.10.2012, we adjourned the 
matter “with direction to the Chairman OGRA to fix the price of CNG” in a fair, lawful and 
diligent manner. It may be reiterated that in that order the Court did not fix the price of 
CNG; it only referred the matter to OGRA and the Federal Government for ensuring due 
Prices   
 
on    15.10.2012 
94.66         1,883 
103.40         3,139 
86.48              1,883 
103.40             3,139 
Const. Petitions 33 & 34 of 2005 
6 
and proper pricing as commanded by law. Pursuant to that order, on the same date, OGRA 
determined a new price, vide S.R.O. ------ (1)/2012, which came to Rs. 61.64 for Region I and 
Rs. 54.16 for Region II. 
9. 
In response to this second price formula, during the hearing on 01.11.2012, Mr. 
Wasim Sajjad and Mr. Abdul Hafiz Pirzada learned Sr. ASCs entered appearance on behalf 
of the CNG licensees and sought two weeks time, which was granted. They contended that 
the price set by OGRA was too low and not commercially feasible. On 19.11.2012, OGRA 
submitted a report (CMA No. 4762/12) which suggested a new consumer price supported 
by a certain audit report. Adjourning the matter, the Court once again directed the 
“stakeholders [to] discuss amongst themselves and come up with an acceptable price formula, keeping 
in view the interest of all of them, particularly the consumers” as mandated by law. 
10. 
During hearings on 04.12.2012, 05.12.12 and 06.12.12, OGRA contended that it could 
not come up with a satisfactory pricing formula since it had not received the audited 
accounts of licenees, which would allow it to determine the various price items in a fair and 
informed manner. The Secretary, Ministry of Petroleum apprised the Court that the Federal 
Government, on its part, was yet to issue policy directions, but the matter would soon be 
taken up by the Economic Coordination Committee of the Cabinet. On 17.12.2012, OGRA 
submitted another report (CMA No. 5189/2012) proposing a price of Rs. 73.96 for Region I 
and Rs. 65.52 for Region II. As late as the last hearing, ie. 20.12.2012, neither had OGRA been 
able to come up with a fairly determined, evidence-based pricing formula, nor had the 
Cabinet issued any directions to resolve this long-standing dispute. 
11. 
From the foregoing, it is clear that there are differing views prevalent about 
appropriate price of CNG. What has, however, been thrashed out in great detail, through 
these proceedings, is the process whereby OGRA is legally required to determine prices as 
well as the principles which it is supposed to apply during this process. OGRA, it may be 
reiterated, has been envisaged as an independent body which is supposed to protect the 
public interest. Its failure to protect ordinary consumers from oligopolistic and monopolistic 
activities cannot be condoned.  
12. 
The learned counsel for OGRA candidly conceded that the earlier pricing formula 
did not meet the legal criteria as demanded by statute. In fact, this act of OGRA as well as 
various other practices represented gross violations of the law, resulting in the infringement 
Const. Petitions 33 & 34 of 2005 
7 
of the fundamental rights of the people of Pakistan by extracting from them, unconscionable 
amounts for the unjust enrichment of the few. It may be recalled that in Muhammad Yasin v. 
Federation of Pakistan (PLD 2012 SC 132), the Court had taken note of the state of affairs at 
OGRA, striking down the illegal appointment of Tauqeer Sadiq as Chairman OGRA. In that 
judgment, the Court also took note of serious allegations of financial wrongdoings 
amounting to billions of Rupees, ordering NAB to investigate the matter. Those 
investigations are still going on. 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. A day-light 
assault on the fundamental rights of the people of Pakistan and their exploitation in 
violation of Articles 3 & 5 of the Constitution cannot be allowed to continue. 
13. 
 We reiterate that the determination of prices is a power vested by various laws on 
the executive functionaries and agencies of the State established under law. Consequently, 
the executive has also been equipped by the law with sufficient expertise and enforcement 
capability for this purpose. Our duty however, extends to reviewing the manner in which 
the executive exercises its powers and to see that the fundamental rights of citizens 
including the right to their hard earned income is protected. This has been highlighted in 
the judgment in the case of Muhammad Yasin supra. In the present case, through our order 
dated 25.10.2012, we exercised this power by striking down OGRA’s pricing formula and 
directing it to prepare a new formula, in accordance with law. As the protector and enforcer 
of the fundamental rights of the people of Pakistan, the Court could not have done 
otherwise. 
14. 
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. In 
various hearings we were informed that the Federal Government is seized of this important 
issue and would take steps for its resolution. On 17.12.2012 we were again told that the 
Cabinet was to meet on 18.12.2012 and would takes decisions for resolution of the issue and 
also give policy guidelines. Yet, even as millions of CNG users continue to suffer because of 
the prevailing deadlock no guidelines were issued on 18.12.2012. 
15. 
Since OGRA has still not been able to come up with a pricing formula based on 
evidence and in accordance with the prescribed process, it is directed once again to 
Const. Petitions 33 & 34 of 2005 
8 
discharge its obligations in accordance with the law. It must do so in a swift manner, and 
after obtaining all necessary feedback from the stakeholders. 
16. 
The questions relating to UFG losses and other issues raised in the Constitution 
Petitions will be considered at the next hearing.  
 
 
Judge 
 
 
Judge 
 
Islamabad 
21.12.2012 
A. Rehman  
 
APPROVED FOR REPORTING.  
 
 
  



 

  



 



   
5332/2006
 



2005

 34  33






4567/2012
Const. P.33/05



 
  

(Const. P. 34/05)



 


(HRC 5332/06)



 
  






 




  
   



  

  

   




  
 


CMAs 4544-4545/12

 
 


 

(CMA 4567/12)
1

    

  
  

  
 

(CMA 4707/12)
 

 

( CMAs 4760-61/12)
  
   
CMA No. 5288/12
 

 
CMA No. 4765/12

  


  



   
 


  
 

  
 


 
 


 





  
   
  


  

   
  







  
 



2

    

    

  

        

    



   

 

(C.P 33/2005

CP34/2005


 
1


 



 
  


    
 




  


(CNG)

    
  
   
2
  

  









 

2012
 
 

33
 
2008 
  


 

 
 

95





    



 
  




  
  
 
 
3395
    


    
  
  
 





12%


 
   



3
 


  

 
  



  
  
 

  



  
 






      


      
 

3

    

      
 




  

      
 
  

        
 



   

 


   
4
  
1992

    

   
     




      


 


   

(2)


  


 
CNG 









 

  


  
 
 

   
   


5



   
   
  

21





  


   



      


 



   

        
    
 

 


  




  




 

 
  


   

 
  
3.2(2)








  



3

  

  
  
 



   



   

3(8)  3(5)

  


  






 

  
(3.(18))
 






  


 
   
 



 


  

14
 
21
 


4

    

  


      


  
  



  



     






    

  





 

  





 

  
 



 
  
 

 

6



25-10-2012
 
   

 



CNG


  
    
   

  



   





5

    

6

    


 

 

 
    

7

     

  
  

  
(MoU)
 
      
 

  

  
   
2008

 25

 











  


  




 

    
 

 
      






 
     
 

  


   


 

 
  

   
   



 


    




 
25-10-2012
   

 
8

 
 
 


  






 
 

 
 



  
SRO (1)/2012
 
    

7

    

 

54.16II
 

61.64I
  


       
 
01-11-2012
  

9
  
 
 
  

 

 

 19-11-2012

   


   



 
 
 
 

(CMA No. 4762/2012) 
 










  


 
     



 

     










   

  



 

    


 



 
06-12-2012  05-12-2012, 04-12-2012 10
      

        


  




  



(ECC)
   




 

(CMA

     



17-12-2012

 


I




  

No. 5189/2012)
 
   

 
 
6 3 . 5 2 I I
    

7 3 . 9 6 






  
  


20-12-2012









 




11

      
  


   

  
   
    

  
   

          
  

8

    


  




 
    
 
12



 
 
   
 





  
   





  
  
     
  

  
  

(PLD 2012 SC 132) 


 


  





 

 
     


5  3
   
         

 
  


  


   
13


  

 







       


  
   
 



  
  

25-10-2012
   








 

  



 


 
 



   

 

14
  
   
   
       


17-12-2012











 






 

 
  
 
       

9

    






 
  





 

  


  
15


 
          








(UFG losses)
 


    
16
  

10 

    

