ISLAMABAD: Amid worsening gas shortages, the Oil and Gas Regulatory Authority (Ogra) has decided to issue fresh marketing licences for about 30 compressed natural gas (CNG) stations blocked since 2008 due to a ban on new outlets.
Informed sources told Dawn on Wednesday that the decision on a long-standing issue was taken early this week on completion of quorum of the Ogra authority as the government appointed an additional secretary of the cabinet division as Ogra’s member oil on additional charge basis.
Although, the Ogra was still short of its four-member sanctioned strength in the absence of its member finance, the induction of Arif Ahmad Khan as member oil completed the quorum required to give legal cover to regulator’s decisions.
Informed sources said a total of 65 applicants having provisional licences since 2008 when the then interim government banned expansion of CNG stations had completed investments but could not be given formal marketing licences to come into operations.
Ogra officials said the decision to issue fresh marketing licences was in line with a May 15 decision of the Supreme Court of Pakistan. The court had directed the regulator to settle the cases of outstanding applicants who had completed the legal formalities under the government decisions and policies.
The regulator had granted about 20 marketing licences early this year following the screening of the applicants having provisional licences through a technical committee. In the meanwhile, the post of member oil fell vacant and the Ogra sought law ministry’s decision if two member Ogra could continue with the process.
The law ministry, however, opined that any critical decision could not be taken by two members and hence it should wait for the quorum to complete to avoid legal complications.
About 10-15 applications among this group of 65 had become dormant for various reasons including investors losing interest in the business due to increasing gas crisis.
A couple of months ago, the government had also lifted a ban on import to CNG kits and cylinders for factory-fitted vehicles even as gas supply to CNG stations is down to just 18 hours a week for about six months now in Punjab.
As if that was not enough, the winters have set in earlier than usual. As a consequence, the government is expected to block gas supplies to CNG stations within a couple of weeks to meet increasing demand in domestic sector and keep fertiliser and textile sectors on ventilators during winters.
Informed sources said the gas supply to CNG stations remained suspended for three months last year which could increase to five months this year as Pakistan Meteorological Department has forecast prolonged winters.
At the request of the Petroleum Ministry, the ECC had allowed in August this year the import of CNG cylinders, kits and related parts for the conversion of vehicles at manufacturing and assembling facilities of original equipment manufacturers because an Italian firm had set up a factory in Pakistan for export purposes.
The ECC had refused to lift the ban on import of CNG kits, cylinders and parts in January, citing gas shortage. The CNG sector was, at the time, getting gas 72 hours a week. This is now down to 18 hours.
The ECC ordered the ban be lifted when Ogra reported that it was resulting in the production of low-quality local cylinders, which are a major health risk.
Published in Dawn, October 16th, 2014
