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Premier stops Ogra from issuing 26 CNG marketing licences [Pan African News Agency]
[November 11, 2014]

Premier stops Ogra from issuing 26 CNG marketing licences [Pan African News Agency]


(Pan African News Agency Via Acquire Media NewsEdge) Prime Minister Nawaz Sharif has barred the Oil and Gas Regulatory Authority (Ogra) from issuing 26 marketing licences to compressed natural gas (CNG) stations it had approved last month, in view of increasing gas demand in the existing network.



Informed sources told Dawn that the government had also decided to seek review of Supreme Court orders that enabled Ogra to issue fresh CNG licences held up for a couple of years.

The Ogra had also been asked to provide details and circumstances of its decision for issuing 26 licences and asked it to put on hold further action on remaining outstanding applications.


In the meanwhile, the quorum of Ogra has been dissolved following transfer of Arif Ahmad Khan, an Additional Secretary of the Cabinet Division who was given acting charge of Member Oil, Ogra about two months ago.

Officials said the prime minister had exercised its discretionary powers to stop Ogra from issuing fresh licences. "This is understandable for Punjab from the standpoint of gas shortage because more stations would require more gas but not in the case of three other provinces where gas shortage is not an issue or is of manageable intensity," they pointed out.

They also said that the Supreme Court had issued three interim orders in the CNG case. The court had directed Ogra to issue licences where all legal formalities had been met and physical completion had been achieved. The court was of the view that the question of gas shortage related to the gas companies and not to the regulator.

However, a final judgement of the case was still awaited. Officials said the review applications could be filed before the apex court only after its final judgement.

There are a total of 69 investors who had completed all legal formalities and physical activities but had been pending issuance of formal operations owing to a series of complications like investigations by the National Accountability Bureau (NAB) and cases in the Supreme Court and high courts.

Ogra had decided last month to issue fresh marketing licences to 26 CNG stations blocked since 2008 due to a ban imposed by then interim government owing to emerging gas shortage.

The regulator had granted about 20 marketing licences early this year following the screening of the applicants having provisional licences through a technical committee. In the meanwhile, the post of member oil fell vacant and the Ogra sought law ministry's decision if two member Ogra could continue with the process.

The law ministry, however, opined that any critical decision could not be taken by two members and hence it should wait for the quorum to complete to avoid legal complications. On completion of quorum for a couple of months, the Ogra approved another 26 licences but could not formally issue these licences.

About 10-15 applications among this group of 69 had become dormant for various reasons including investors losing interest in the business due to increasing gas crisis.

A couple of months ago, the government had also lifted a ban on import to CNG kits and cylinders for factory-fitted vehicles even as gas supply to CNG stations is down to just 18 hours a week for about six months now in Punjab.

At the request of the Petroleum Ministry, the ECC had allowed in August this year the import of CNG cylinders, kits and related parts for the conversion of vehicles at manufacturing and assembling facilities of original equipment manufacturers because an Italian firm had set up a factory in Pakistan for export purposes.

The ECC had refused to lift the ban on import of CNG kits, cylinders and parts in January, citing gas shortage. The CNG sector was, at the time, getting gas 72 hours a week. This is now down to 18 hours.

The ECC ordered the ban be lifted when Ogra reported that it was resulting in the production of low-quality local cylinders, which are a major health risk.

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