ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Tuesday imposed fine on another oil marketing company for operating illegal petrol pumps in Sindh and without developing legally required storage infrastructure.

In an order, the Ogra said M/S Gas & Oil Pakistan (Pvt) Limited (GOPPL) was granted permission to establish an oil marketing company in June 2012 subject to construction of minimum storage capacity of 20 days before beginning sales.

On completion of oil storage facility at Sahiwal, the company was allowed to start sale of oil products “only in Punjab” in November 2014.

The Ogra was, however, informed that the company was operating six petrol pumps in Sindh, including at four different places of Ghotki, and one each at Khairpur and Sukkur even though its licence conditions did not allow pumps outside the Punjab.

The regulator served show cause notice to the OMC in April 28, 2015 over violation of the licence conditions. In response, the company stated that it had not commissioned any outlet in Sindh and outlet mentioned in the letter of March 2, 2015 “was mere a clerical mistake”.

Upon this, the Ogra ordered physical inspection at the respective sites of petrol pumps which verified that all the petrol pumps were not only operational but also had the dealership or were in the name of the GOPPL.

The Ogra said considering the law, the company’s position in response to the show cause notice was ‘unacceptable’ as the OMC was found in violation of Rule 32 of the Pakistan Petroleum (Refining, Blending & Marketing) Rules of 1971.

“Further, by doing all above, you have not only violated the condition/restriction imposed by the OGRA but also wilfully provided the wrong information”, the regulator wrote in its order and said it had taken a serious note of the violations and wilful misreporting.

Therefore, the Ogra imposed a penalty of Rs3 million at the rate of Rs500,000 per illegal petrol pump as maximum permissible under section 6(2) of Ogra Ordinance and rule 44 of the Pakistan Petroleum (Refining, Blending & Marketing) Rules 1971. The Company has been asked to deposit the penalty within 10 days.

This is the sixth oil marketing company that has been imposed penalty in almost a week for not abiding by licence conditions, Ogra’s instructions and the government policy on oil stocks.

After the petrol crisis of January this year, the Ogra had started actively pursuing oil marketing companies to meet marketing standards and storage infrastructure requirements.

Last week, the Ogra had imposed Rs14.80 fine on five oil marketing companies for not developing required storage infrastructure and maintaining sufficient stocks of petroleum products in violation of their license requirements.

The companies were imposed fine following completion of separate proceedings against them in which the companies were given opportunity to defend their positions. All of them were issued show cause notices for violating licence conditions and rules. These included Askar Oil, Admore Gas, Byco Petroleum, Hascol and Overseas Oil Trading.

Published in Dawn, July 8th, 2015

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