Oil marketing licences only after storage construction: OGRA clarifies


ISLAMABAD, Feb 7 (APP): The Oil and Gas Regulatory Authority
(OGRA) Tuesday clarified that marketing licences were issued to Oil
Marketing Companies (OMCs) after they fulfilled all technical requirements and construction of storage facilities as per law.
A spokesman of OGRA clarifying a news item appearing in a section of print and electronic media regarding issuance of 21 licenses to establish OMCs in last six months, he said it has issued only construction licenses strictly as per the applicable rules and policy of Federal Government, in accordance with its objective to increase private investment.
Currently, he said the country was in dire need of new oil storage due to drastic increase in demand of petrol and diesel since last few years.
He said only those companies would be allowed to market the product, which would complete the required storage and meet all technical and other requirements as per rules.
“In 2006, the government policy for establishing new OMC entailed an upfront equity of Rs 3 billion and investment of Rs 6 billion in three years and the criteria remained in field till 2010,” he said.
Due to meager investment in storage facilities and to encourage new investors for development of storage infrastructure in the country, the spokesman said, the government relaxed the policy in 2010 with Rs 100 million as equity and investment of Rs 500 million in three years.
“Since July 2016, OGRA has granted 21 licences for construction of
oil storage infrastructure to the companies namely: Best Petroleum Private Limited, Oil Industries Pakistan Private Limited, Accel Petroleum Private Limited, Euro Oil Private Limited, Oleum Petroleum Private Limited, Al-Noor Petroleum Private Limited, Dammam Petroleum Private Limited, Max Fuels Private Limited, Fast Oil Private Limited, Hi-tech Lubricants Private Limited, Jinn Petroleum Private Limited, Vital Petroleum Private Limited, International Petrochemicals Private Limited, Allied Petroleum Private Limited, Only One Energy Private Limited, Pak Gasoline Services Private Limited, Shams Petroleum Private Limited, Berkeley Oil & Gas Development Private Limited, Taj Gasoline Private Limited My Petroleum Private Limited
and Terminal One Limited,” he said.
The spokesman said these licences had been issued to new applicants to develop the storage infrastructure only and not for purpose of marketing of the product or development of petrol pumps.
“Once, the companies complete their storage facilities as per OGRA technical standards, they are allowed to market the product and develop petrol pumps to the extent of province/area, where they have the storage facilities in place,” he said.
In addition, they are restricted to operate a specific number of retail
outlets to be opened based on their available storage capacity.
Since July 2016, four companies namely Petro Well Private Limited, Kepler Petroleum Private Limited, Z&M Oil Private Limited & Outreach Private Limited were granted marketing licences after completion of satisfactory storage facilities.
However, they are bound to restrict marketing activities in their
respective provinces and areas, where they have the storage facility, he added.
The spokesman said the storage construction was a gradual process
and time was needed to materialize such projects as it involved procurement of land, resources, material, obtaining of No Objection Certificates (NOCs), construction of civil, mechanical and electrical works followed by Third Party Inspection to ensure compliance with technical standards before granting permission to operate.
“On account of strict monitoring by OGRA, the industry has added
140,347 M. tons of storage both for MS (Motor Spirit) and HSD (High Speed Diesel) in the system with an estimimated investment of Rs 14.4 billion since the transfer of regulatory functions to OGRA from Ministry of Petroleum and Natural Resources,” he said.