Turf war between OGRA and Industries Ministry

Regulator threatens to sue after ministry authorises 3 firms to conduct inspections.

Express August 14, 2011

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) and the industries ministry have apparently gotten into a turf war.

After the explosives department at the industries ministry authorised three companies to conduct safety inspections at oil and has installations, Ogra threatened to sue the ministry, terming its actions “an illegal move to encroach on [Ogra’s] powers.”

In a sternly worded letter to the industries ministry, Ogra said that the chief inspector explosives had no right to regulate hydrocarbons.

“There is no legal provision which empowers the chief inspector explosives to undertake aforesaid activity in the realm of hydrocarbons in any manner and it will be a blatant violation of the Ogra Ordinance and Rules made there under if the subject activity is allowed to continue any longer and not stopped forthwith,” wrote Mansoor Muzaffar Ali, the head regulator for gas at Ogra, in his letter to the ministry.

Ogra has gone as far as advising the All Pakistan Compressed Natural Gas Association (APCNGA) not to comply with the “illegal whims and wishes” of the Chief Inspector Explosives and continue to follow the guidelines laid out by Ogra.

The APCNGA, caught between the two government departments, has decided to challenge the chief inspector’s decision in court, after its members were forced to pay fees to two separate agencies.

“We are paying double fee as one to Ogra’s nominated third party inspectors and other to third party inspectors notified by the chief inspector,” said APCNA Chairman Ghiyas Paracha.

Chief Inspector Explosives Haroon Rehman had authorised Global Pakistan (Pvt) Ltd, Petrosin Ravi Industries and Al Jadeed Engineering as third-party inspectors. Sources said that Global Pakistan is supplier of equipment to CNG stations whereas Al Jadeed Engineering is compressors’ service provider and Petrosin has their own CNG stations.

“How can a company that itself operated in the CNG business be allowed to inspect CNG stations,” said one person familiar with the matter who wished to remain anonymous.

Rehman confirmed that some of the inspection firms were also involved in the CNG business themselves but said that they would not be allowed to inspect their own installations or where their businesses had interests.

A committee headed by the industries secretary had decided that the explosives department was the only entity empowered to regulate the safety of oil and gas installations around the country and that Ogra’s domain was restricted to with pricing, marketing, tariff, duties, tax exemptions, and the supply of oil and gas.

The decision of the committee has sparked controversy between Ogra and explosives department. Ogra officials believe that the decision by the industries ministry was biased.

Published in The Express Tribune, August 15th, 2011.

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