ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has opened floodgates to oil marketing companies (OMCs) by granting 21 fresh licences in just six months compared to only 20 over the past 70 years.

The new 21 companies given licences between July-December 2016 are expected to invest about Rs10.5 billion over the next few years to set up storages and filling stations in various parts of the country.

This comes at a time Ogra has been struggling for effective monitoring and enforcement of the existing oil marketing companies mainly because of workforce and technological constraints. This was one of the reasons behind a nationwide petrol crisis about two years ago.

Ogra Senior Executive Director Imran Ghaznavi told journalists at a briefing that the regulator was taking the services of third party inspectors and OMCs in checking quality of petroleum products at the retail level and that of Hydrocarbon Development Institute of Pakistan (HDIP) at import and storage level for product tests.

He said the regulator did not have its own laboratories for quality examination. Responding to a question, he could not confirm if the total storage capacity in the country was enough to provide mandatory 21-day coverage of products stocks.

An official said there used to be 6-7 major OMCs in the country with national network but the criteria for the OMCs was relaxed during the tenure of Pervez Musharraf. As a consequence, the number of OMCs has since went up to 20 but most of the new entrants were allowed operations in selective provinces.

Mr Ghaznavi said Ogra granted 21 licences to establish OMCs and gave marketing permission to five others. In addition, four licences were granted for development of new oil storages and terminals at different locations while two lube oil blending plants and six lubricant marketing companies were granted licenses in the last six months.

Responding to a question, he said the objective of the regulator was to “foster competition, increase private investment and ownership in the midstream and downstream petroleum industry”.

The companies that were granted licences to establish OMC included Best Petroleum, Oil Industries Pakistan, Accel Petroleum, Euro Oil, Oleum Petroleum, Al-Noor Petroleum, Damam Petroleum and Max Fuels.

The new licencees also included Fast Oil, Hi-Tech Lubricants, Jinn Petroleum, Vital Petroleum, International Petrochemicals, Allied Petroleum, Only One Energy, Pak Gasoline Services, Shams Petroleum, Berkeley Oil and Gas Development. Also included in the list were Taj Gasoline, My Petroleum and Terminal One.

The companies that were given permission to start marketing of petroleum products over the last six months included Horizon Oil Company, Petrowell, Kepler Petroleum, Outreach and Z&M Oils. These companies would be able to market their products only the respective provinces where they had built their oil storages.

The Ogra official said to ensure compliance with the notified technical standards, the regulator through different Third Party Inspectors (TPIs) also undertook the inspection of oil storage infrastructure developed by various OMCs like Bakri Trading Company at Shikarpur, Petrowell at Port Qasim, Outreach at Manga, Kepler Petroleum at Daulatpur, Gas & Oil Pakistan (Pvt) Ltd at Shaheed Benazirabad (Nawabshah), Z&M Oils at Pattoki (Kasur), Hascol Petroleum Limited at Amangarh, Daulatpur, Shikarpur and Mehmoodkot and Horizon Oil Company at Vehari.

The four terminal licences issued to new companies Hascol Terminals Limited, Fauji Tarns Terminal Limited, Hascol Petroleum Limited for development of new oil storages/ terminals at different locations like Thalian, Port Qasim and Kotla Jam, which will further strengthen the oil supply infrastructure.

Published in Dawn, February 3rd, 2017