ISLAMABAD: The Senate Standing Committee on Petroleum has decisively rejected the proposed privatization of the Pakistan Mineral Development Corporation (PMDC).
A meeting of the Senate Standing Committee on Petroleum was held on Tuesday under the chair Senator Umar Farooq firmly rejected the proposed privatization of the Pakistan Mineral Development Corporation (PMDC).
The committee’s discussion highlighted concerns over the potential layoffs of approximately 5,000 employees. Senator Manzoor Ahmed voiced strong opposition to the privatization plan, questioning the need for such a move: “Is PMDC operating at a loss that it needs to be privatized? To my knowledge, PMDC is a profitable entity.” He expressed his commitment to preventing job losses in Balochistan, stating, “Thousands of people will become unemployed if PMDC is privatized. I will not allow this to happen.” He urged that if privatization is deemed necessary, local residents should be given priority for employment opportunities.
Officials from the Petroleum Division clarified that PMDC had been included in the second category for privatization under the 2023 State-Owned Enterprises (SOEs) Act, which identified entities for potential privatization. They asserted that PMDC has remained profitable for the past three years, leading to its inclusion in the privatization list by the cabinet. However, concerns were raised regarding the federal government’s ownership of the land, as Senator Ahmed noted that it is only leased, not outright owned by the federal government.
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Additionally, the committee discussed the outdated methods and machinery used by PMDC, with officials citing 80 fatalities over five years as indicative of serious operational challenges.
Senator Quratulain questioned how the federal government could proceed with privatization without consulting the provincial government, underscoring that the land belongs to the province.
It is relevant to note that the federal government has decided to privatise the Pakistan Mineral Development Corporation (PMDC), which is a semi-autonomous corporation. The PMDC was established in 1974 and is working under the administrative control of Petroleum Division. PMDC is premier mineral development company of Pakistan which regulates coal and salt mining in the country.
The corporation (PMDC) has the mining rights of largest proven reserves of salt, all across the country. Most significantly, it has the mining rights pink salt reserves. The pink salt resources are of deep interest not only in the local market at national level, but it also grabs the interest of foreign markets and salt traders abroad.
The Senate Standing Committee on Petroleum also shifted focus to the operational policies and margins for petroleum dealers, who reported significant deductions from fuel payments by banks, impacting their profitability. Petroleum dealers noted that for every 100 rupees, banks deduct 80 paise, and if fuel costs 300 rupees per liter, banks take away approximately 2.40 rupees.
Chairman of the Oil and Gas Regulatory Authority (OGRA), Masroor Khan, confirmed that OGRA has the authority to calculate costs for Pakistan State Oil (PSO) and set margins for oil marketing and dealers. He stated that credit card payment deductions are matters between dealers and banks, emphasizing that dealers only purchase oil from oil marketing companies.
Calls for deregulating petroleum dealers were made by the Petroleum Dealers Association, which argued that it could enhance their operational conditions. The last set margin for dealers was 8 rupees and 64 paise, inclusive of franchise fees, as noted by Chairman OGRA. The committee instructed OGRA and petroleum dealers to meet and collaboratively address ongoing issues regarding dealer margins and operational policies.
Lastly, Senate Standing Committee on Petroleum reviewed delays in the gas supply project for the Gulistan Tehsil in Qilla Abdullah, initiated in 2015 but stalled due to funding and policy restrictions. Committee members called for a revised policy ensuring that areas along the new gas pipeline route receive the necessary gas connections.
