ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has issued show-cause notices to three oil-marketing companies for unauthorised sale of petroleum products in violation of legal requirements and their own marketing licences.

The companies — Exceed Petroleum, Kepler Petroleum and Quality-1 Petroleum — have 15 days to clarify why they should not be penalised or their licences cancelled for violating laws, regulations and rules.

Ogra said all the three companies had set up their retail outlets in Khyber Pakhtunkhwa without having a licence to sell products in the province.

Kepler Petroleum was allowed to market its products in Sindh only after it set up a storage facility in Daulatpur, the authority said. Likewise, Quality-I Petroleum was allowed to sell its products in Punjab only after it set up a storage facility in Sahiwal, whereas Exceed Petroleum was also give permission for marketing of its products in Punjab after it set up a storage facility in Kot Abdul Malik.

The companies were granted licence by Ogra to establish an oil marketing company (OMC) under the applicable law. After setting up storage facilities, they were allowed to sell or market the products in the respective provinces.

This was because of the condition of the licence to have minimum storage of 20 days of proposed sales as infrastructure prior to beginning sale in the country.

Under the licence, these companies were not allowed to construct, develop or own any retail outlet in the province where they did not have the required storage in compliance with condition.

However, when authorised officers of Ogra conducted field visits to Swabi and Mardan in KP, they found that these companies were operating outlets for fuelling the vehicles.

Ogra told the companies that as per condition xv of the licence, they were required to abide by all the requirement of the “Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016, which have now repealed the Pakistan Petroleum (Refining, Blending and Marketing) Rules, 1971.

Under condition xix, the licence will be cancelled for breaching any condition of the permission and directive issued by Ogra.

It said that under rule 69 of the above rules, a person who contravenes any provisions of the ordinance, these rules, terms and conditions of the licence, or the decisions of Ogra “is punishable with fine which may extend to Rs10 million and in case of a continuing contravention with a further fine which may extend to Rs1m for every day during which such contravention continues”.

Ogra will initiate ex-parte proceedings if the companies fail to submit replies within the deadline.

Published in Dawn, May 5th, 2017