THE insertion of Article 172(3) in Pakistan’s Constitution via the 18th Amendment was stupendously transformative, as it restructured the sovereign ownership of oil and gas. In the new constitutional scheme, the federation and the provinces were to be co-owners of oil and gas produced within the provinces. Yet, even after 16 years, the full benefits of this constitutionally bestowed co-ownership remain a covenant to be realised for the provinces.
Around the time John D. Rockefeller was tapping into the Pennsylvania oil fields, India enacted its first oil legislation, the Petroleum Act, 1881. The legislation did not address ownership; rather, it regulated only the import, transportation, and possession of oil. The concept of private ownership of oil and gas resources, prevalent in the US and recognised by its supreme court as early as ‘Brown vs Spilman’ (1895), would never see the light of day in the Indian subcontinent; instead, de facto sovereign control would reign.
The Indian Councils Acts, 1892 and 1909, and the Government of India Acts, 1915 and 1919,allowed the ‘central government’ to regulate oil, though they were gleefully silent on ownership. The Petroleum Act, 1934,did not rework this much. In any event, before the Government of India Act, 1935, the government of India was unitary and only thereafter became federal, listing ‘oil’ as a federal subject.
This position persisted under Pakistan’s constitutions of 1956, 1962, and 1973, with ‘gas’ additionally listed as a federal subject. The 18th Amendment altered this legal paradigm by introducing Article 172(3), which proclaims: “Subject to the existing commitments and obligations, mineral oil, and natural gas within the province or the territorial waters adjacent thereto shall vest jointly and equally in that province and the federal government.”
Cooperative federalism in the matter of oil and gas is being undermined.
Though by virtue of Article 97 and 137 of the Constitution, the federal government retains executive authority over the regulation of oil and gas, the doctrine of ‘joint ownership’, together with oil and gas appearing in the Federal Legislative List, Part-II, means that the Council of Common Interests (CCI), by virtue of Article 154 of the Constitution, is empowered to formulate and regulate policies in respect thereof, and exercise supervision and control over related institutions.
Clause 1.3.6 of the Petroleum Policy, 2012, enacted by the CCI, establishes a “reorganised Directorate General of Petroleum Concessions (DGPC) comprising federal and provincial representatives”. The de jure responsibility of the reorganised DGPC, inter alia, is to “decide the matters of grants, regulation, annulment and monitoring of all petroleum concessions” in the country, consistent with the Petroleum Rules, 2013.
Regrettably, the provincial directors who are part of the reorganised DGPC have been given no de facto say in matters of “grants, regulations and annulments” of petroleum rights. The federal director at the reorganised DGPC deals with such matters unilaterally, recognising no situation where he can legally be outvoted, even by the four provincial directors combined.
This approach is akin to Louis XIV of France declaring before the Parliament of Paris in 1655: “l’état, c’est moi” (“the state — it’s me”). The federal director, being a state functionary and one member out of a total of five who form the reorganised DGPC, cannot single-handedly claim to be the reorganised DGPC (though he does so and this ingression is less a personal trait, and more a projection of the federal government’s resolve to maintain its hegemony over oil and gas resources, even when the Constitution says otherwise).
In ‘Wattan Party vs Federation of Pakistan’ (2006), the Supreme Court held CCI policies enacted under Article 154 to be binding on the federal government. Thus, if the latter takes exception to the implementation of a particular provision of the Petroleum Policy, 2012, vis-à-vis the role of the reorganised DGPC, then its remedy lies in referring the matter to a joint sitting of parliament in accordance with Article 154(7), and not in flouting the same.
“The earth, and all that is therein, is given to men, for the support and comfort of their being. Yet being given for the use of men, there must of necessity be a means to appropriate them some way,” wrote John Locke in his Second Treatise of Government. The Constitution of Pakistan prescribes appropriation, which attends to the ownership, regulation, and control of oil and gas resources in a spirit of cooperative federalism. Yet the federal government’s functionaries can scarcely resist bellowing to their provincial counterparts, ‘l’etat, c’est moi’.
The writer is a practising barrister.
Published in Dawn, November 1st, 2026
