ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has imposed a Rs17.8 million fine on five oil marketing companies for not maintaining sufficient stocks of petroleum products in violation of their licence requirements which led to the country’s worst petrol crisis in January.

The companies were fined after completion of separate proceedings against them in which they were allowed to defend themselves. All of them were issued show-cause notices for not maintaining adequate stocks which resulted in acute shortages.

The five companies have been asked to deposit the fine within 10 days.

Ogra also imposed a fine of Rs9.1m on Askari Oil Marketing Company — a commercial arm of the armed forces — for violation of the Pakistan Petroleum Refining, Blending & Marketing Rules 1971 at the rate of Rs100,000 per defaulting petrol pump.

Ogra said the marketing company’s defence was not plausible as it developed 91 outlets between 2011 and 2015. It said the company had violated the government’s policy and directives of Ogra despite categorical instructions not to expand petrol pumps without necessary storage arrangements.

It also imposed a fine of Rs4.7m on Admore Gas Private Limited. It said that Admore first disowned such petrol pumps and removed them from the list provided to Ogra, but it was unacceptable.

It was fined Rs100,000 per outlet for 47 pumps.

Ogra imposed Rs1.6m fine on Byco Petroleum. It said Byco’s response to a show-cause notice was untenable because Ogra’s decision to suspend its marketing operations in 2011 was challenged by Byco which kept such stations running; they deposited the penalty in 2014 along with storage development plan and its operations were restored.

Byco, however, did not possess its own storage infrastructure. It said Byco’s expansion of 16 pumps was in gross violation of rules. Hence, Rs100,000 fine per pump found in violation of law.

Hascol Petroleum was fined Rs1.9m because it also appeared to have misled Ogra. It said storage facility referred by Hascol in KP were in fact storage of a lube oil blending plant and the Ogra had asked the company twice to get it inspected through third party inspectors if it claimed them to be storage infrastructure but remained reluctant.

“The said storage, therefore, cannot be considered as HPL storage infrastructure in KP,” Ogra said and pointed out that it developed 19 retail outlets in KP and Balochistan in violation of government policy and Ogra instructions.

While imposing Rs0.5m fine on Overseas Oil Trading, Ogra said the company had expanded its petrol pump network without back-up storage. The region-wise storage infrastructure was very vital and no such expansion could be allowed under rules unless backed up with necessary supply points and storage.

Violation of storage infrastructure requirement is violation of rules, said Ogra, adding that it had imposed fine on all companies under Section 6(2) (p)of the Ogra Ordinance and Rule 44 of the Pakistan Petroleum Refining, Blending & Marketing Rules.

Published in Dawn, July 1st, 2015

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