ISLAMABAD The Sindh High Court (SHC) on Friday barred OGDC from conducting auction of liquefied petroleum gas (LPG) produced at its two gas fields — Bobi and Kunnar — after serious objections filed by the Power Gas Company and Aftab Traders on the move.

The petitioners in their application had stated that OGDC was moving towards formation of LPG cartels and cited example of Chanda Oil and Gas Fields in district Kohat where the LPG auction was held two years back and only one large company was able to purchase the rights on all the 25 tons per day production.

The petitioners had sought suspension of the auction process and allow the existing companies to continue business at these gas fields.

A division bench comprising Chief Justice Sarmad Jalal Osmany and Justice Ruksana Ahmed directed OGDC not to open up the bids as long as the matter was not resolved.

The bench adjourned the hearing for October 8.

OGDC had invited bids for the auction of 65 tons of LPG per day from Bobi and 35 tons from Kunnar gas fields. It had received 23 bids for 23 tons of LPG from Bobi and 18 bids for 35 tons from Kunnar, both the fields are located in Sindh.

Earlier, OGDC had been selling liquefied gas to 15 LPG marketing companies on temporary basis since 2001 for Kunnar field and the temporary allocations from Bobi fields were initiated in 2004.

Petroleum Minister Syed Naveed Qamar told Dawn on Friday that the auction process had been initiated to bring transparency in the sale of LPG by the state-owned OGDC.

'Besides, auction would also add to the higher income of OGDC,' added the minister.

An official of Aftab Traders told Dawn that OGDC had invited new players in the fields in 2004 for development of LPG at the Bobi gas fields and 15 companies were allocated quotas on trial basis.

They said that all the 15 companies had established modern plants and distribution network and the sudden change of policy was not fair on the part of OGDC.

The official said despite repeated requests OGDC had not responded to the formalisation of temporary allocations of LPG quota.

He said that in 2008 OGDC had asked Enar Petrotech, a subsidiary of the Ministry of Petroleum and Natural Resources, to conduct technical evaluation of the LPG plants at Bobi fields.

He said that after the inspection the 15 LPG companies were asked to upgrade their plants and each company spent Rs4-Rs5 million for the up-gradation.