CNG stations: Ministry seeks inspection rights for Hydrocarbon Institute

Wants to break Ogra’s monopoly over grant of rights.

ISLAMABAD:

In a major move, the Ministry of Petroleum and Natural Resources is expected to approach the Economic Coordination Committee (ECC) to restrict the Oil and Gas Regulatory Authority (Ogra) which has allegedly granted CNG station inspection rights to its favourite private sector companies by sidelining the Hydrocarbon Development Institute of Pakistan (HDIP).

“Now, the petroleum ministry wants to equally divide inspection work between Ogra and HDIP,” Petroleum Minister Dr Asim Hussain told The Express Tribune.

Ogra had stopped assigning the task of inspecting compressed natural gas (CNG) stations to HDIP in October 2009, which benefited private sector companies but caused a revenue loss of about Rs6 to Rs7 million per month to HDIP.

Earlier when Naveed Qamar was the petroleum minister, the ministry sent a summary to ECC, seeking grant of 40 per cent inspection rights to HDIP, which was facing severe financial problems due to monopoly of Ogra. Later, on the assurance of Ogra Chairman Tauqeer Sadiq, the ministry withdrew the summary.

However, the promise has remained unfulfilled and now Petroleum Minister Asim Hussain wants 50 per cent inspection rights for HDIP, which has expertise and introduced CNG as fuel in automobiles.

At the time when Pervez Musharraf was president, two inexperienced private parties were conducting inspection of CNG stations. So far, Ogra has granted inspection rights to four private companies.

“HDIP can check specification of machinery used in CNG stations, but private parties have no knowledge in this regard, which causes explosions at CNG stations,” an official said.

HDIP wants to end the role of private companies in inspection of CNG installations and has demanded full checking and inspection rights, which will generate revenue as well. Technical and safety inspection is a typical job of public-sector agencies like HDIP, but ECC in 2006 also allowed the private sector to do the task.

Ogra had also proposed an agreement with HDIP to place the latter on the same position as private companies. The agreement was only for two years, extendable for another two years entirely at the discretion of Ogra with powers to terminate it anytime without any reason. However, the HDIP board, in a meeting on October 3, 2009, did not endorse the agreement.

HDIP has been established by an Act of parliament for the specific purpose of inspecting, testing, approving equipment and giving technical advice to the CNG industry.





Published in The Express Tribune, July 16^th, 2011.