The Oil and Gas Regulatory Authority (OGRA) on Wednesday lifted marketing restrictions imposed on two oil marketing companies (OMCs), OOTCL and Bakri, after they gave a firm commitment on the time line for the development of oil storage as per their license conditions.
A statement issued by OGRA said on account of deposition of penalty and firm time-line commitment for development of storages, the authority considered the request of OOTCL and Bakri , in consultation with Ministry of Petroleum and Natural Resources and decided to restore their marketing activities. It is important to mention here that the government claims that OGRA works autonomously for regulating the petroleum sector. However, the OGRA press release clearly mentions the administrative control of the Petroleum Ministry to decide on important regulatory issues. As per the rules OGRA falls under the domain of the Cabinet Division and Petroleum Ministry has no role in regulating the sector other than devising the policy. Earlier, OGRA on the orders of the Minister for Petroleum Dr Asim Hussain had imposed a penalty of Rs21 million on 7 OMCs on their failure to develop oil storage facilities as per their license conditions. The penalty was imposed as it was noticed that despite issuance of show cause notices to these companies two months back they had not taken any serious measures to start developing the required oil storage facility of 30 days as per their licence conditions.
The OMCs were therefore barred from doing business till they develop oil storage facility. The companies were given six months concessional period to develop oil storage after the petrol crisis in June when two oil refineries closed down and there was severe petrol shortage in Punjab and Khyber Pakhtunkhwa. The companies had not shared any plans with the Petroleum Ministry on developing oil storage which invited these penalties. The companies refrained from doing business included Total Parco, Byco Askar, Hascol, Admore, OOTCL, and Bakri.
Seen in this light, it is expected that the oil marketing companies will be more serious in honouring their commitment now that restrictions imposed on them have been removed. The regulatory body has made it abundantly clear that OMCs will ahve to meet the time line for the development of oil storage as per their license conditions.
