Failure to keep 20 days' reserve: Ogra imposes Rs 21 million fine on seven OMCs

The Oil and Gas Regulatory Authority (Ogra) has imposed a fine of Rs 21 million on 7 oil marketing companies (OMCs) for violation of licence terms and conditions under which the OMCs should maintain 20 days' fuel stock. The Ministry of Petroleum and Natural Resources and Ogra in June had advised these marketing companies to improve their storage capacity, otherwise they would not be allowed to operate.
A statement issued by Ogra said that on the directives of Minister of Petroleum and Natural Resources, it has provisionally suspended the marketing activities of seven OMCs on account of not constructing/ maintaining the mandatory oil storage/stocks of petroleum products in the country. Further, the companies have also been penalised with the imposition of penalties of Rs 3.0 million each, it added. These companies are Askar, Hascol, Admore, OOTCL, Bakri, Byco, and Total.
The Ogra on June 16 had issued show-cause notices to these OMCs for not maintaining requisite stocks, as advised by DG, Oil. According to sources in Ogra, the Authority had time and again warned the marketing companies, but they have been showing laxity, and most of them have not constructed the required storage facilities and adoption of other appropriate measures to cope with the fuel shortages, which reached a peak in June and created a serious fuel crisis in the country.
Sources alleged that instead of abiding by the licence rules, the OMCs are strengthening existing cartels and creating newer ones to thwart any government attempt to force them into compliance. "We have also found out that in the past there were some oil marketing companies which were given licences to operate, without binding them to follow the rules and regulations of Ogra", sources said, adding that any crisis or emergency ever appeared would again mock the nation in spite of bundle of measures and policy guidelines introduced by the concerned authorities till this effect to end the emergency like situations has been proved as a wild goose chase.
They said that the government could not take strict measures against OMCs which had already invested their hefty amounts in oil market of Pakistan in spite of ever soaring circular debt issue. They also underlined the helplessness of the incumbent government despite having certain paraphernalia to smoothly regulate and strictly monitor the demand, supply and pricing of POL products. It is relevant to mention that Pakistan's daily consumption of petrol is around 6,667 tons per day. Though OMCs are bound to maintain certain quantities of petroleum products in reserve, the sudden shortage of petrol would not have happened if they had sufficient stocks. Further, marketing companies had stopped lifting petrol from Parco, reportedly because of over-charging.