Chairperson OGRA stated that as these companies operate in the private Oil Companies Advsiory Council is the right forum to take up this issue and not Ogra which operates as a regulator and is empowered to take action against OMCs that are violating agreements. Member standing committee Taj Afridi argued that if anyone violates a rule, even if the violator be from the private sector, OGRA, as the regulator, must initiate action. Chairperson Ogra said that, 'a lot is happening in the country but we can't take action as it is not within our purview. If we go beyond our mandate, OMCs will point out that it does not fall within our purview". However, Secretary Petroleum Division Sultan Sikandar Raja said that if an entity operating in a deregulated sector takes any decision against public interest then regulations can be imposed on that sector.
The committee decided that OMCs must follow a queue system enabling transporting companies to serve those who come first. The committee was informed that OGRA has withdrawn the exemption of tracker system in tank lorries at Kohlu and Barkhan Districts; however, a uniform policy of installation of trackers in oil tankers is being enforced from January 4, 2017. A petrol pump owner is allowed to transport his product from depot to retail outlet and the physical reporting system and tracker system are both applicable to self-collection.
The standing committee directed OGRA to serve suspension notice on M/s Askar 1 who established petroleum pumps in purported violation of the jurisdiction of its license. The committee was informed that the company's licence was issued to the establishment of OGRA. The company was given the right to set up pumps in only Punjab but the company is operating in Punjab, Sindh, Balochistan, KPK and AJ&K/ Gilgit Baltistan. A fine of Rs 13 million has been imposed on Askar 1. The company was established in 2005 when there was no condition of storage capacity.
In 2015, OGRA imposed the condition that no OMC can operate without oil storage facility and suspended the company's license for not having backup storage. However, in 2017 the company established storage in Machikay on the basis of which it was allowed to commence operation in Punjab and KPK but not in other provinces.
Askar 1 has 286 pumps in Punjab and 65 IN KPK. In Sindh the company's pumps are 21, Balochistan 6, AJK/Northern areas 16 - pumps established prior to the formal mandatory condition of storage capacity. At present the company cannot establish a single pump without adequate storage facility.
Senator Nisar Muhammad recommended M/s Askar be served suspension notice within 15 days as the penalty clause is already exhausted. Senator Baz Muhammad supported this recommendation.
The committee threatened to send the case of OMCs and four IPPs - Nishat, Nishat Chunian, M/s Liberty and Lalpir Power Limited - to National Accountability Bureau (NAB) for not honouring the original agreement on furnace oil supply.
The committee directed Legal Advisor Nepra, Mian Ibrahim to submit a detailed report on implementation of fuel supply agreement as billions of rupees of malpractices'/kickbacks are involved in supply of furnace oil.