ISLAMABAD – The National Assembly Standing Committee on Petroleum has directed the Oil and Gas Regulatory Authority (OGRA) to ensure that all licence conditions placed upon the oil marketing companies (OMCs) especially relating to proper storage facilities in shortest possible time without any extension.
The committee meeting was held under the Chairmanship of Sheikh Waqqas Akram, who asked the OGRA Chairman Tauqir Sadiq to provide details of what action the authority had taken against OMCs, which have not fulfilled their license conditions. Chairman OGRA said that they have show caused nearly all the companies on not full filling their license conditions and in some case even penalties were imposed.
However, the committee chairman observed that three small OMCs were not fulfilling many conditions while Oil and Gas Regulatory Authority was lenient with them. OGRA Chairman said that those OMCs which were operating on provisional licenses and were granted an extension up to June 2011.
The committee directed OGRA to ensure that all oil marketing companies fulfill their licensing conditions and no more extension should be provided to them.
The Petroleum Secretary Imtiaz Kazi informed the committee that the government collected Rs 4.2 billion in revenue from petroleum products in December. He said there were two taxes on petroleum products; one was petroleum levy that was fixed at Rs 10 per liter while the other was 17 percent GST on the final price. The government charges 20 percent tax on petrol per litre, 20 percent on diesel, 23 per of HOBC, 18 percent on kerosene oil, and 15 percent on JP oil.
The committee grilled the Ministry of Petroleum Director General (Gas) Saeed Ullah Khan when he was wrong-footed by a report on pilferage in the Sui Northern Gas Pipelines Limited (SNGPL). The DG Gas took the plea that he had appointed only two months ago and was unaware of the report.
Chairman of the committee expressed displeasure over the lax attitude of the senior official and warned him that he was answerable to the committee and should come well prepared otherwise he would be issued a note of displeasure from the committee.
SNGPL Managing Director Abdul Rashid Lone informed the committee that the petroleum ministry had formed a committee that compiled a fact find report on the theft and pilferage but had given no recommendations. He said a departmental inquiry was held and four low-grade employees were identified and they would be sacked within the next few days.
Not satisfied with the answer of the MD, the committee asked him to explain the actual unaccounted for gas (UFG) losses. For the last year, he said, OGRA had set a target of seven percent of UFG for the company but these increased to 9.6 percent. The shareholders lost Rs 3.5 billion, as the amount was utilised to recover UFG losses over the prescribed limit. SNGPL MD accepted that the number of illegal connections was on the rise.
The committee directed SNGPL to set an example by sacking a few of the top officials who were either involved in corruption or when illegal connections were given to housing colonies or village due to their lax attitudes. The committee members also demanded that it be informed immediately if somebody tries to unduly influence the decision.
The petroleum ministry informed the committee that the draft Gas Utilities Companies Act 2010 was circulated to all the provinces and ministries of finance, commerce, industry and interior but no province other than Punjab had bothered to reply. The committee instructed the ministry to rewrite again to provinces and other ministries giving them a time of 30 days to comment on the draft bill and warned that if they failed to reply within the stipulated time, the bill should be sent to the parliament for approval.
