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Oil and Gas Regulatory Authority (OGRA) has imposed fine amounting to 40 million rupees on six Oil Marketing Companies (OMCs) for not maintaining the required fuel stocks as per terms and conditions of the licences awarded to them.
In a news release, OGRA Spokesman Imran Ghaznavi said fine of five million rupees each has been imposed on Attock Petroleum Limited, Puma, Gas & Oil Pakistan Limited and Hascol, and 10 million rupees each on Shell Pakistan and Total Parco Pakistan Limited.
He said all oil marketing companies have been directed to ensure regular supply of petroleum products to their retail outlets, otherwise fine would be imposed on them as per the law.
The OMCs are required to deposit the fine within 30 days and can seek review of the Ogra orders after payment of 50pc fine also within 30 days. The companies have also been asked to improve the supplies to their outlets immediately otherwise further fine could be imposed on continued contravention of the rules.
The regulator found that OMCs under the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016 and Ogra Ordinance, 2002, were obligated not to abandon any regulated activity, as a part or whole, resulting into discontinuation of supply of petroleum products or its sale in any area without the prior written consent of the regulator.
Rule 69 of the Pakistan Oil (Refining, Blending Transportation, Storage and Marketing) Rules, 2016, empowers the regulator to impose a fine on its licensees on contravention of Rules and Ogra’s directives and decisions.
In addition, in light of the directions of the Ministry of Energy, issued from time to time, the companies were repeatedly directed by the regulator to ensure availability of products at retail outlets to avoid any discontinuation of supplies in the country. However, the companies reportedly abandoned the regulated activity of marketing by either discontinuation of supplies or provision of insufficient supplies at their retail outlets which also caused serious inconvenience and unrest in the masses.
Based on its show cause notice, response received and hearing held, Ogra blamed these companies for serious petrol shortage in the country. The regulator in exercise of the power conferred under Rule 69 of the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016, and under Section 6(2)(p) of the Ogra Ordinance imposed penalties on breach of Rule 53(x) of the said Rules.
Meanwhile, Shell Pakistan said the petrol shortage in the country was due to unprecedented increase in demand during May which even the energy ministry could not foresee. He said the 20-day storage was currently limited to Karachi and could be extended to Punjab and Khyber Pakhtunkhwa by the end of this year after the pipeline was completed.
Speaking to media through a video conference on Thursday, Habib Haider, manager external communications of Shell Pakistan, said that petrol demand more than doubled last month compared to the sales in March, and nobody including the refineries, ministry, Ogra or the oil companies could understand it.
He downplayed the show-cause notice against oil companies alleging that hoarding by the companies and petrol stations caused the current petrol shortage.
“When the prices are going down there is no sense to hold the stocks, actually people would dump off the costly stocks as fast as they could to cut losses,” Mr Haider said, adding that the energy ministry had restricted all imports for April and directed all the oil companies to lift oil from the local refineries, but the refineries too were not prepared for the massive increase in demand in May.
In a news release, OGRA Spokesman Imran Ghaznavi said fine of five million rupees each has been imposed on Attock Petroleum Limited, Puma, Gas & Oil Pakistan Limited and Hascol, and 10 million rupees each on Shell Pakistan and Total Parco Pakistan Limited.
He said all oil marketing companies have been directed to ensure regular supply of petroleum products to their retail outlets, otherwise fine would be imposed on them as per the law.
The OMCs are required to deposit the fine within 30 days and can seek review of the Ogra orders after payment of 50pc fine also within 30 days. The companies have also been asked to improve the supplies to their outlets immediately otherwise further fine could be imposed on continued contravention of the rules.
The regulator found that OMCs under the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016 and Ogra Ordinance, 2002, were obligated not to abandon any regulated activity, as a part or whole, resulting into discontinuation of supply of petroleum products or its sale in any area without the prior written consent of the regulator.
Rule 69 of the Pakistan Oil (Refining, Blending Transportation, Storage and Marketing) Rules, 2016, empowers the regulator to impose a fine on its licensees on contravention of Rules and Ogra’s directives and decisions.
In addition, in light of the directions of the Ministry of Energy, issued from time to time, the companies were repeatedly directed by the regulator to ensure availability of products at retail outlets to avoid any discontinuation of supplies in the country. However, the companies reportedly abandoned the regulated activity of marketing by either discontinuation of supplies or provision of insufficient supplies at their retail outlets which also caused serious inconvenience and unrest in the masses.
Based on its show cause notice, response received and hearing held, Ogra blamed these companies for serious petrol shortage in the country. The regulator in exercise of the power conferred under Rule 69 of the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016, and under Section 6(2)(p) of the Ogra Ordinance imposed penalties on breach of Rule 53(x) of the said Rules.
Meanwhile, Shell Pakistan said the petrol shortage in the country was due to unprecedented increase in demand during May which even the energy ministry could not foresee. He said the 20-day storage was currently limited to Karachi and could be extended to Punjab and Khyber Pakhtunkhwa by the end of this year after the pipeline was completed.
Speaking to media through a video conference on Thursday, Habib Haider, manager external communications of Shell Pakistan, said that petrol demand more than doubled last month compared to the sales in March, and nobody including the refineries, ministry, Ogra or the oil companies could understand it.
He downplayed the show-cause notice against oil companies alleging that hoarding by the companies and petrol stations caused the current petrol shortage.
“When the prices are going down there is no sense to hold the stocks, actually people would dump off the costly stocks as fast as they could to cut losses,” Mr Haider said, adding that the energy ministry had restricted all imports for April and directed all the oil companies to lift oil from the local refineries, but the refineries too were not prepared for the massive increase in demand in May.
