ISLAMABAD: The Competition Commission of Pakistan (CCP) has taken notice of reports of state regulatory authorities not providing a level playing field to private firms optimistic of entering Pakistan’s gas distribution sector.

According to an official letter of which a copy is available with this scribe, the Competition Commission had written to the Oil and Gas Regulatory Authority (Ogra) and the Petroleum Ministry seeking replies over why issuance of licenses was withheld despite the expiry of exclusivity of licenses of two state owned gas utilities – the Sui Southern Gas Company (SSGC) and the Sui Northern Gas Pipelines Limited (SNGPL).

The SSGC and the SNGPL are the only two companies operating in Pakistan’s gas distribution and transmission sector, although the exclusivity periods for their transmission and distribution had ended in 2003 and 2010 respectively.

According to the letter sent in July 2013, the CCP had asked Ogra and the petroleum ministry why a level playing field was not provided to new entrants into the natural gas sector.

“In order to verify the facts, this commission has sought from both oil and gas regulatory authority the and the ministry of petroleum and natural resources to present their stand… to the commission within seven days to the receipt of this notice,” says the letter.

Interestingly, EGAS (Pvt.) Ltd had applied for issuance of license for distribution and sale of natural gas, but Ogra has not issued the license.

-- Letter July

Ogra replied

CCP chairman seat vacant Acting chairman aa gaya hay

Decision to be taken a couple weeks.

The commission in its letter had asked both companies to respond to “whether the monopoly and/or exclusivity granted to SNGPL and SSGC for the transmission, distribution and sale of natural gas has ended or is still continuing” or “whether Ogra has issued any license for distribution and sale of natural gas license to any company subsequent to expiry of exclusivity period mentioned in SSGCL and SNGPL licenses?”

The CCP also asked whether EGAS (Pvt.) Ltd had not fulfilled legal requirements for the distribution/sale license or if there was any restriction or ban imposed on issuance of the said licenses by Ogra or the Government of Pakistan.

In a reply to the CCP, Ogra maintained that it had not issued any license to any company subsequent as no company had applied for it earlier.

A decision is likely to be taken soon by the CCP on the matter.

Earlier, Ogra through a letter dated 18th July 2012 had informed the petroleum ministry that the two applicants had submitted their requests for grant of licences for use of Oil and Gas Development Company Limited low pressure flare gas from Rajian, Chakwal field and Kunnar, Hyderabad fields.

The regulator also said that the SNGPL and the SSGC licenses are for transportation, distribution and sale of natural gas whereas Mehr gas and EGAS projects are based on virtual pipelines technology and no transmission or distribution pipelines is required.

Instead, it said, gas would be transported by road via trailer mounted gas cylinders battery to consumers.