Ogra role in fixing oil prices urged: Senate body forms sub-committee
By Amir Wasim
ISLAMABAD, Jan 26: The Senate Standing Committee on Petroleum and Natural Resources on Wednesday asked the government to empower the Oil and Gas Regulatory Authority (Ogra) to fix petroleum prices.
The committee, which also constituted a sub-committee on the subject, was critical of the fact that the Oil Companies Advisory Committee (OCAC) continued to fix petroleum prices although Ogra was established for the purpose about three years ago.
The Senate committee, which met at the Parliament House, reviewed the impact of prices of petroleum products on the country's economy and expressed the view that the issue of fixing the price should be handled by Ogra instead of the OCAC.
Sources told Dawn that opposition members in the committee raised the issue of hike in the prices of petroleum products and criticized the OCAC for not taking into account the impact of price hike on country's economy and common people before making any decision.
The opposition members, the sources said, were of the view that the OCAC members had their own vested interest as they represented oil companies and had no links to the common man.
The opposition members said the government had introduced a unique deregulation concept in the world where an oil companies' cartel had been authorized to fix the prices of petroleum products.
After criticism from the opposition members, committee chairman Senator Syed Dilawar Abbas formed a five-member sub-committee to review the basic parameters of the policy and suggest changes in the existing system with a view to passing on maximum benefit to consumers.
The sub-committee comprised senators Muhim Khan Baloch, Dr Ismail Buledi, Rukhsana Zuberi, Ghulam Sarwar Kakar and Saeed Ahmad Hashmi. Meanwhile, talking to Dawn, Senator Dilawar Abbas said that most of the committee members had no knowledge about the existing system regarding fixation of oil prices in accordance with the international market price.
He said it was true that the OCAC consisted of companies' representatives but they had only been authorized to review, fix and notify the ex-depot sales price of petroleum products on fortnightly basis in accordance with a pricing formula.
He said that the formula had been given to the OCAC by the government and it could not be changed without the government's approval. Mr Abbas said that according to an ordinance, promulgated in 2001, fixation of oil prices was the responsibility of Ogra. He said the Senate committee had called for expediting the process of handing over this responsibility to Ogra, which was a public forum.
The Senate committee was informed that four licences had recently been granted for exploration in Kohlu, Kalchas, Bagh and Shahana and measures were being taken to enhance production of petroleum products in the country.
The committee members were also given a briefing on the working of the Oil and Gas Development Company Limited (OGDCL). They were informed that despite some operational constraints, the OGDCL was carrying out its expansion work on Dhodak, Dakhni, Sinjhoro and Tando Allahyar complex projects.
It was said that for the first time, an initiative had been taken to take the OGDCL abroad with a view to reviewing investment opportunities and to explore joint venture opportunities.
The Senate body stressed the need for extensive exploration of oil and gas reserves and directed the OGDCL to tap new horizons and accelerate its programme of exploration of new sources of oil and gas in the country.
There was a consensus among committee members that there was a wide potential to explore new sources of energy in the country and that offshore exploration provided an ample scope in this regard.
The committee recommended that the OGDCL should look into the possibility of engaging survey parties for suggesting exploration sites of petroleum products. The senators were informed that the OGDCL enjoyed no preference either in granting of any exploration licence or fixing price of its oil and gas and all local and foreign companies operating in the country were treated even-handedly.
The cash reserves of the OGDCL amounted to Rs27 billion and the company owned 120.91 MMSTB (million standard barrels) and 9,391.98 BSCF (billion standard cubic feet) of oil and gas reserves.
The OGDCL, the committee was told, possessed a sound equipment base, having seven drilling and two work over rigs. The committee was also given a detailed briefing about the organizational structure of the OGDCL, its performance and achievements, particularly the exploration and production activities carried out during the last 10 years.
The committee members pointed out that the people of smaller provinces, particularly those of Balochistan, were not getting their due share in jobs as they were unable to compete with those belonging to developed areas.
The committee recommended that a relaxation in age and qualification be given to the candidates from Balochistan and other smaller provinces with a view to giving maximum representation to the people of smaller provinces.
