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Ogra to issue 200 licences for CNG outlets

March 29, 2013

— File Photo.

ISLAMABAD: With gas shortages increasing, Oil and Gas Regulatory Authority (Ogra) may have to issue about 200 new marketing licences for compressed natural gas (CNG) stations very soon.

“It has become fait accompli for the Ogra to issue new licences owing to policy obligations”, said a senior Ogra official but added that a government’s approval for the CNG licences on the last day of its tenure had created complications.

He said the issue of new marketing licences had been pending for more than eight months now but delaying its approval until end of its tenure by the government created an impression of some wrong doing. As a result, Ogra constituted a technical committee of its professionals to examine all cases forwarded by the petroleum ministry and found them to have been genuinely completed.

Based on same criteria, the Ogra would have to issue licences to about 200 new CNG stations because investors had valid provisional licences, had obtained third-party completion certificates and got gas allocation from gas companies.

Former prime minister Raja Pervez Ashraf approved on March 14 the issuance of marketing licences to 69 investors who had completed their CNG stations by June 30, 2012 and the petroleum ministry conveyed this to the Ogra on March 16.

Most of these licences pertained to influential politicians and their relatives who had purchased provisional licences from ordinary investors who had failed to complete CNG stations due to various reasons.

The provisional licences for the new CNG stations had been issued before a ban on new stations was imposed in March 2008 by the then government. The provisional licences were extended from time to time.

Informed sources said Ogra had been informing the government about gas shortage and advising it to formulate a policy regarding new CNG stations. As former adviser to the prime minister on petroleum Dr Asim Hussain was opposed to expansion in CNG sector, the petroleum ministry had earlier sought law ministry’s opinion over the legal status of provisional licences that had expired many years ago but had been given extensions.

The law ministry declined to be dragged into the controversy and advised the petroleum ministry to settle the issue through consultations with the Ogra and the issue remained pending for more than three years.

In the meanwhile, the investors completed their CNG stations and extended pressure on the government through the PPP parliamentarians to allow one-time permission to those who had achieved 100 per cent progress.

In view of recent observations by the Supreme Court over the government’s policy directives to Ogra, the regulator has now sought an explanation from the petroleum ministry if the prime minister’s approval fell under the definition of policy advice under the law. “Once a clarification is received from the petroleum ministry, we will examine it at the level of Ogra authority”, said the official.

Since the people have invested millions of rupees and the government, gas companies and Ogra did not take steps to stop them from going ahead with provisional licences, it has become obligation to issue them marketing licences for CNG stations.

He said the prime minister’s approval pertained to about 69 cases, a total of 200 applicants appeared to be fulfilling the criteria i.e. 100 per cent completion by June 30, 2012 and would have to be allowed marketing rights to avoid legal complications.