File photo. Ali al-Saadi—AFP
OGRA finds that companies violated license conditions by not maintaining sufficient stocks
The Oil and Gas Regulatory Authority (OGRA) on Thursday accused six major oil marketing companies (OMCs) for the ongoing nationwide petroleum shortage, and imposed a cumulative fine of Rs. 40 million on them for failing to maintain mandatory fuel stock minimums.
In a press release, OGRA spokesman Imran Ghaznavi said the authority had imposed fines of Rs. 5 million each on Attock Petroleum Limited; Puma; Gas and Oil Pakistan Limited; and Hascol, while Rs. 10 million fines were imposed on Shell Pakistan and Total Parco Pakistan Limited.
He said all OMCs had been directed to ensure regular supply of petroleum products to their retail outlets, adding that they had been warned that failure to do so would result in fines being imposed on them under law.
The regulator also issued fresh show-cause notices to Askar Petroleum; Byco Petroleum; and BE Energy for similar violations of rules and license conditions that had resulted in the nationwide petroleum shortage.
According to local media, the OMCs must deposit the fined amount within 30 days, and can avail a review of the OGRA orders after payment of 50 percent of the fine, also within 30 days.
Under the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules 2016, and the OGRA Ordinance 2002, all OMCS are obligated to continue regulated activity, as a part or whole, so there is no halt to the supply of petroleum products or its sale in any area without the written consent of OGRA.
Rule 69 of the Pakistan Oil (Refining, Blending Transportation, Storage and Marketing) Rules 2016 further empowers the regulator to impose fines on any licensees that violate the rules or OGRA directives.
A spokesman for Shell Pakistan, which was fined Rs. 10 million, claimed the petrol shortage had been the result of an unprecedented increase in fuel demand during May. Addressing media via video-link, he said demand for petrol doubled in May as compared to sales in March—when a lockdown was imposed, thereby limiting need for fuel—and claimed no one in either the refineries, the petroleum ministry, OGRA, or the OMCs had been able to predict this.