ISLAMABAD - To put independent Oil and Gas Regulatory Authority (Ogra) under its purview, Ministry of Petroleum & Natural Resources (MPNR) has drafted a summary to be sent to federal cabinet seeking its approval on certain amendments in regulator’s ordinance, reliable sources told TheNation on Friday.
Failing to get Ogra nod over projects of import of Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) coupled with its stiff opposition to collect hefty Rs9 billion from the gas consumers paying bills on regular basis, Petroleum Ministry has resolved to end the sovereignty of the regulatory authority by introducing certain amendments in Ogra Ordinance.
The sources further told that petroleum ministry has drafted a summary seeking federal cabinet’s approval on certain amendments in Ogra Ordinance in a bid to bring regulator under its administrative control. They said after cabinet’s approval, the Ogra, entrusted with the task to protect rights of consumers would be bound to accept orders of oil and gas ministry in letter and spirit and would not be able to reject them at any cost. And. appointments and removal of Chairman and Members of Ogra would be mandate of petroleum ministry with certain amendments in the ordinance. Again, in case of absence of any Ogra member, the ministry would be authorised to appoint someone on the responsible slot. Putting Ogra, which is mandated with task to monitor the affairs of petroleum and natural resources, under the umbrella of petroleum ministry is also against the rights of consumers and international practices and there is a fear that international donors can raise voices against this move, which as a result would ultimately make the regulator toothless in protecting the rights of consumers, sources added.
At present, all the regulatory bodies such as National Electric Power Regulatory Authority (Nepra), Pakistan Electronic Media Regulatory Authority (Pemra), Ogra, Securities and Exchange Commission of Pakistan (SECP), Indus River System Authority (IRSA) and Pakistan Telecommunication Authority (PTA) are working under Cabinet Division. Proposed control of Ogra is tantamount to further increasing government influence in the regulatory regime, which is contrary to the international practices. And, regulatory bodies including Ogra were set up by the understandings between the Government of Pakistan (GoP) and the International Financial Institutes (IFIs) and were the outcome of various development assistance agreements between the GoP and IFIs with the World Bank on top of them.
A cabinet member when contacted to know his stance on the proposed draft of oil ministry’s summary to be sent to the Cabinet for its consent pertaining clipping the powers of Ogra, he on the condition of anonymity, said that it was not the right time to consider such proposals as the next general election was approaching fast. The Supreme Court of Pakistan has already advised the regulatory authority to refuse to entertain those instructions/orders, which are against the rights of consumers. Moving with such ambitious and half-baked proposals at this point of time would invite a lot of criticism from the opposition. This kind of naive initiative could also lead to some kind of schism within the federal cabinet, the member maintained.
Earlier, the Adviser to the Prime Minister on Petroleum & Natural Resources Dr Asim Hussain and Secretary Petroleum Dr Waqar Masood Khan in a meeting with the Premier had sought his nod to approve three proposals of the ministry. The ministry’s three proposals included dissolution of Ogra, putting the regulator under the ministry’s purview, and last but not the least the proposal of amending the Ogra Ordinance in order to curtail its power.
It is note worthy that the Ogra was the only downstream regulator, which only implemented the guidelines provided by the government as highlighted in section 21 of the Ogra ordinance. It (Ogra) is not bound to implement the petroleum ministry’s guidelines under section 21 if these were inconsistent with the Ogra ordinance that required recovery of only prudent costs from consumers.
Background interviews and discussions with energy experts transpired to this scribe that ministry of Petroleum was making all-out efforts to bring Ogra under its control in order to get its desire objectives of importing LNG and LPG in accordance to its sweet will would bore no fruit as it is impractical and not possible ahead of fast approaching general elections. They said that oil ministry’s draft of trimming the powers of Ogra is because the regulator used to oppose LNG import on the existing terms and conditions and also added that by disagreeing with the ministry on six points and relaxed rules’ for import of LNG, the ministry is mulling to restrict its roles and responsibilities.
They were of the view that Ogra should continue functioning under Cabinet Division, which was in the supreme interests of the oil and gas consumers and also inline with international practices. And, under section 21 of Ogra ordinance, the regulatory authority is not bounded to implement the petroleum ministry’s guidelines under section 21 if these were inconsistent with the Ogra ordinance.