ISLAMABAD: Overseas Investors Chamber of Commerce and Industry (OICCI) has sought intervention from Directorate General Petroleum Concessions (Petroleum Division) and Oil and Gas Regulatory Authority (OGRA) for resolution of issues being faced by its member companies.
The OICCI, representative body of top 200 foreign investors in Pakistan, regularly conducts surveys of its members on matters relating to the business environment in Pakistan.
Such survey findings are shared with key stakeholders and regulators to facilitate corrective measures on priority in the interest of promoting Ease of Doing Business leading towards promoting Foreign Direct Investment (FDI) in the country.
In a letter to Directorate General Petroleum Concessions, OICCI stated that in its latest 2023 Regulatory Survey, many of the OICCI member companies belonging to energy and petroleum sectors have highlighted that the Government nominated buyers are unable to make timely payments which makes it difficult for the companies to make timely payments against taxes and royalty.
It is therefore requested that the Government of Pakistan (GoP) should amend the Exploration and Production (E&P) Rules to allow E&P companies to make payment of royalty within one week from receipt of payment from the buyers.
“We are confident that the GoP will soon take necessary proactive measures to resolve the above highlighted issues to promote FDI in petroleum and energy sectors in the country,” said Abdul Aleem Chief Executive/ Secretary General in his letter.
In another letter to Chairman OGRA, CE said that in the latest 2023 OICCI Regulatory Survey, many of OICCI member companies belonging to energy and petroleum sectors have highlighted following issues and concerns: (i) it is recommended that OGRA should have strong mechanism/ process to penalise the Dealers/ Operators involved in illegal practices and non-compliances who get away because the regulator passes on the responsibility onto the OMC.
This in turn leads the matter to be dragged into the courts to settle the disputes, which results in lengthy and cumbersome process. The fines, in such situations, should be of significant value that actually create an impact; (ii) OGRA should develop a framework which ensures that local refinery products should be prioritised for upliftment before opting for imports, especially when the country is facing pressure on its foreign exchange reserves; and (iii) detailed working of fortnightly exchange rate adjustment allowed on Motor Gasoline & High-Speed Diesel, and applicable to the local refineries in determining their ex-refinery price is not shared. As exchange rate component is an integral part of ex-refinery prices having a direct impact on refineries cash flows/profitability, the same should be transparently shared with the local refineries.
The Chief Executive further requested Chairman OGRA to take necessary proactive measures to resolve the above highlighted issues to promote petroleum and energy sectors related FDI in the country.
Copyright Business Recorder, 2023