The government is likely to introduce amendments to the Oil and Gas Regulatory Authority (Ogra) Ordinance 2002 in order to give representation to provinces in the regulatory body.

Provinces have supported the amendments proposed by Sindh for giving them representation in the regulatory authority. Under the amendments, the government will also appoint a vice chairman from amongst Ogra members for one year from each province through rotation.

Following the 18th Constitution Amendment, the provinces have joint and equal role and responsibility in natural resources. Amendments to the Ogra Ordinance have been proposed to give equal representation to the provinces in regulatory affairs of these resources. A bill is being introduced for reforms in Ogra in a bid to follow the model of National Electric Power Regulatory Authority (Nepra), which gives representation to the provinces.

Under the amendment bill, Ogra shall consist of a chairman to be appointed by the federal government and four members, one from each province to be appointed by the federal government in consultation with the provincial government concerned.

At present, Ogra has a chairman and three members – oil, gas and finance.

Under the proposed bill, every member shall be a professional of known integrity and competence with at least 15 years of related experience in law, business, engineering, public administration, finance, accounting, economics, management, petroleum industry or consumer affairs.

According to the bill, the chairman and members shall be appointed by the federal government for an initial term of four years and shall be eligible for reappointment for a similar term. However, the federal government will appoint them following consultation with the provincial governments.

The federal government, in the draft bill, said that after the 18th Amendment to the Constitution of Pakistan 1973, the provinces had been vested joint and equal role, responsibility and functions in the executive and regulatory domain in matters related to mineral, oil and natural resources, hence, any mechanism working at the federal level to regulate affairs of distribution of these resources and matters connected therewith must be mutually shared and agreed upon.

However, this can be made possible only if any regulatory mechanism possesses equal representation from all provinces, hence, it is necessary to provide for equal representation from the provinces in the regulatory authority.

The Sindh government has proposed amendments for the restructuring of Ogra to give representation to the provinces. Khyber-Pakhtunkhwa (K-P) has fully supported the amendments.

The K-P government said that it agreed with the amendments proposed for the Ogra Ordinance 2002 as long as indigenous consumers were ring-fenced and the burden of imported gas (RLNG) consumers was not transferred to the indigenous gas consumers.

The government of Balochistan has also proposed amendments. It said that the instant matter was related to the provincial entry points in the management structure of federal entities.

The Punjab government said that the authority shall consist of a chairman to be appointed by the federal government and four members – one from each province to be appointed by the federal government in consultation with the provincial governments.

However, it opposed the extension in tenures and said that the chairman and provincial members shall have a fixed term of four years and may not be extendable.

It further said that the maximum age of chairman and members shall not exceed 58 years at the time of appointment.

The Punjab government said that it deemed since provincial governments have deep public insight, representation in Ogra would bring multifarious changes for the wellbeing of the public, including but not limited in different areas.

The amendment will result in safeguarding the interest including the national security of Pakistan in relation to regulate activities in accordance with Ogra ordinance, rules and regulations. It stresses on devising a mechanism to diminish exploitation and price distortion by market, stakeholders in petroleum sector due to inefficient role by Ogra.

Having the largest consumers of petroleum products in Punjab, provincial representation is essential to perform a proactive role to set prices of the petroleum products in a rationalised manner. It also urge to encourage market driven economies in the petroleum sector in view of the contemporary socio-economic trends. The Punjab government has also sought a framework for maintaining date of entire mid and downstream chain to have direct access to the provinces.

Published in The Express Tribune, March 2nd, 2021.

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