ISLAMABAD: On the request of defence authorities, the federal government has finally ordered immediate suspension of unauthorised operations at two key oil installations at Keamari in Karachi being carried out by private oil marketing companies (OMCs) without prior security clearance, it emerged on Sunday.
The petroleum division of the ministry of energy asked the Oil and Gas Regulatory Authority (Ogra) to take action in the matter as the ministry of defence (MOD) had been showing “serious concern over the operations of the unauthorised terminals”.
The MOD had written letters about the unauthorised activities by oil companies without security clearance in February last year and then followed up in June 2017.
As the operations continued unabated, the defence secretary called a meeting of stakeholders on March 1 this year and told the officials concerned in clear words that this could not be allowed to go on.
As a result, Ogra formally asked two OMCs — Al-Noor Terminal and Hascol Petroleum — “to immediately stop any unauthorised operation/activity, if carried out, at the (Keamari) storage terminal failing which action will be taken” under the applicable laws.
Ogra officials said the ministry of defence had complained that the storage terminals of the two firms at Keamari were being operated without getting NoC (no objection certificate) from the ministry of defence.
Ogra asked to ensure all OMCs obtain defence ministry’s NoC before starting construction of storage facilities
The petroleum division said the defence authorities had been repeatedly raising the issue of unauthorised setting up and operations of oil terminals by Al-Noor Petroleum and ZY & Co that later transferred the facility to Hascol. Earlier, the defence ministry had “declared the terminals constructed by M/S Al Noor Terminal (Pvt) Ltd and M/S ZY & Co (Pvt) Limited (later leased out to M/S Hascol Petroleum Limited) as unauthorised, as they were constructed without obtaining mandatory NoC from the MOD”.
Recently the defence authorities reported that the “two terminals were still operative despite clear instructions to stop illegal/unauthorised activities there”. As a result, Ogra was asked again by the petroleum division to take necessary action.
Procedure for storage construction
The government also asked the oil regulator to put in place a procedure that should be followed in case of any future storage construction to avoid annoyance of the defence authorities.
“To avoid such cases in future, all existing and new OMCs may also be directed not to commence construction work for development of storage prior to NoC from the MOD,” the petroleum division said, adding that the “final permission to commence construction of any storage be issued after obtaining the NoC”.
An official of one of the oil companies said the OMCs had been requesting the setting up of fresh storages on the desires and persuasions of the petroleum division and Ogra under requirements of their marketing licences ever since the country had faced crisis-like situation in January 2015 due to petrol shortage.
OMCs complain of delays
In some cases, he said, the OMCs had the provisional approvals from the regulator for additional storage but in many cases the defence authorities were taking too long in processing the requests for NOCs.
He agreed the regulator had not issued ‘final permission’ for construction or storages.
Officials in the OMCs said they had been asking the government to introduce in consultation with defence authorities ‘a time-bound’ mechanism under which the requests by OMCs and NOCs by the defence authorities are issued or denied instead of sitting on such cases indefinitely.
He said the expansion of retail petroleum network was directly linked to storage capacity and OMCs were bound under the laws and rules to have storage for at least 30 days of average sales.
Published in Dawn, May 14th, 2018