ISLAMABAD: The newly installed Pakistan Tehreek-e-Insaf government (PTI) is said to be seeking the merger of two oil and gas regulators in wake of opposition from the Oil and Gas Regulatory Authority (Ogra) and the World Bank (WB).
The advancement made in gas-sector reforms under the previous PML-N administration is appearing to be reversed by the PTI government, reports Dawn.
The gas sector reform programme recommended by the WB and a task-force under ex-prime minister Shahid Khaqan Abbasi had concluded in deliberations with the provinces for the creation of an independent Pakistani Petroleum Exploration and Production Regulatory Authority (PPERA) which would oversee upstream oil and gas sector which is exploration, production and pricing of oil and gas at field gate.
However, the petroleum division under the federal minister Ghulam Sarwar Khan with the assistance of the finance ministry has suggested the amalgamation of upstream regulatory functions which is presently being carried out by the directorate general of petroleum concessions with Ogra.
Presently, Ogra is responsible for looking after the downstream, midstream oil and gas business which includes storage, refining and marketing of petroleum products and transmission and distribution of liquefied natural gas (LNG), liquefied petroleum gas (LPG) and natural gas.
According to informed sources, the petroleum division has told Ogra to prepare a summary for the Council of Common Interests (CCI) requesting transfer of upstream oil and gas regulation to Ogra as a centralized regulator to take care of the whole oil and gas sector from exploration and production to its sale to consumers.
Moreover, sources in the petroleum division shared Ogra had opposed the amalgamation, stating it would create a conflict of interest between helping investors and safeguarding the interests of consumers.
Sources said Ogra Chairperson Uzma Adil in a letter sent to the petroleum division had stated its rules didn’t permit of moving a summary without deliberations with the stakeholders i.e. businessman, investors and consumers.
Ms Adil contended Ogra didn’t have the capacity and needed expertise for taking over the regulation of the upstream and oil and gas sector.
However, the WB contended if the policy intent was to setup a new independent upstream regulator, the recommended PPERA legislation would attain this aim and be introduced as a stand-alone legislation.
It added if the decision is to merge the upstream regulator into Ogra and setup one large regulator, this could be reached by making a revision to the Ogra Ordinance 2002.
WB in deliberation with the law and justice division said introducing the upstream regulation in Ogra via new regulation to the Ogra Ordinance 2002 would be a challenging task because this method wasn’t in compliance with the conventions of legal drafting and subjected to a constitutional challenge since it modified the scope and administrative structure of Ogra.
