The Shell Pakistan Limited (SPL) on Wednesday agreed to pay compensation to the victims of June 25 oil transportation accident near Ahmedpur East, leading to deaths of over 215 people, after the Oil and Gas Regulatory Authority (Ogra) threatened legal action.

After the fuel tanker crashed and started leaking on the side of a highway, hundreds of people from a nearby village rushed to the scene to collect the fuel. They were engulfed in flames when the spill ignited.

The Ogra wants Shell to pay $2.4 million, or $9,500 to the heirs of each person killed. In this regard, the regulator had given a deadline to the oil marketing company i.e. until today (Wednesday).

The SPL said it was in discussions with relevant authorities over the “means by which this financial assistance can appropriately reach the injured and the families who have lost their loved ones.”

However, the subsidiary of Royal Dutch Shell did not specify the amount it planned to pay.

SPL pays Rs10m penalty, Ogra rejects

The SPL on Tuesday paid Rs10mn penalty imposed by the Ogra for the June 25 oil transportation accident but the payment was immediately rejected by the regulator, saying it was partial compliance of its order that also required the oil marketing company to pay compensation to families of the victims at a rate Rs1 million for the deceased and Rs0.5 million to the injured.

“This is only a partial compliance and we reject it,” said a spokesperson to the regulator, Imran Ghaznavi.

Ogra holds SPL responsible for the deaths

Ogra Spokesperson Imran Ghazanvi said Wednesday that a probe found the company responsible for the disaster. The regulator says the tanker was not fit to transport oil and that the driver's licence was invalid.

Earlier, in its report on the oil tanker accident at Ahmedpur Sharqia, Ogra stated that although the oil tanker had been outsourced, the responsibility of maintaining standards lay with Shell since it was the licensee of Ogra.

According to Ogra's three-member committee, the tanker did not meet the technical standards required to carry 50,000 litres of petrol and it did not meet the regulations of Ogra and the Department of Explosives. Additionally, the tanker was carrying a fake fitness certificate.

In contrast, SPL in its primary report about the incident maintained that tank lorry TLJ-352, a vehicle on contract from the Karachi-based Marwat Enterprises transport company, had a capacity of 50,000 litres and was carrying motor gasoline.

The accident was described as a “rollover incident resulting in spillage and fire” with the extent of reported damage amounting to “130 dead, 100 injured; 75 bikes and 3 cars burnt”.