Day-to-day oil, gas matters do not require CCI nod

Centre sees need for council's approval only for formulating policies, making amendments

ISLAMABAD:

The federal government is working on a plan to bypass the Council of Common Interests (CCI) in administrative matters relating to day-to-day operations of oil and gas companies, a move that may spark backlash from provinces.

Sources said the federal government did not want to seek consent of the CCI, represented by all four provinces, for day-to-day administrative affairs of the gas sector.

At present, several decisions pertaining to oil and gas are being taken by the federal cabinet and the Economic Coordination Committee (ECC). The federal government says the daily administrative matters about the management of oil and gas entities, which are within the exclusive jurisdiction of the federal government and the respective provincial administration, do not require the CCI's consideration. However, it says all new oil and gas policies or amendments to the existing policies must be placed before the CCI for approval. It also wants all regulatory decisions be taken by the regulators concerned in compliance with provisions of the existing legislations, policies or rules.

The federal government wants implementation of Article 154 of the Constitution that deals with functions and rules of procedure for the CCI and reads "the Council shall formulate and regulate policies in relation to matters in Part-II of the Federal Legislative List and shall exercise supervision and control over related institutions".

The interpretation and implementation of the Article has been debated at various forums, especially after the 18th Constitutional Amendment. Officials told The Express Tribune that the issue of "oil and gas-related decisions through ECC" was earlier raised by the government of Khyber-Pakhtunkhwa (K-P) through a letter written to the Cabinet Division.

Later, the matter was placed before the ECC in its meeting held in April 2012. It discussed the viewpoint of K-P government in detail and it was decided that the matter concerning jurisdiction of the CCI and the ECC vis-a-vis Part-II of the Federal Legislative List may be placed before the Council of Common Interests for policy decision.

At that time, the Ministry of Petroleum also sought advice of the Law and Justice Division, which said "policy decisions requiring new legislation or which affect the existing legislation are required to be placed before the CCI for approval". However, the affairs covering day-to-day functions of the federal government and related institutions do not need to be placed before the CCI.

The said opinion was formed in light of decisions of the superior judiciary. In a case involving Ghafoor Textile Mills vs Wapda, the words "formulate", "regulate", "policy", "control" and "supervise" were critically examined. The Supreme Court in its judgment laid down the guidelines.

The Law Division argued that the CCI was not required to make decisions regarding the day-to-day working of the corporations mentioned in Part-II of the Federal Legislative List and of related institutions. It further said the CCI was not required to determine tariff for supply of electricity by Wapda to consumers and to revise the same from time to time as it fell within the day-to-day work.

It may be pointed out that the fixation of electricity tariff depends on various factors, which regularly and frequently fluctuate warranting revision from time to time. In compliance with the opinion of the Law Division, the Petroleum Division submitted all cases to the CCI requiring approval of policies such as (i) Petroleum (Exploration and Production) Policy including all subsequent amendments, (ii) Marginal/Stranded Gas Fields – Gas Pricing Criteria and Guidelines, (iii) Tight Gas (Exploration & Production) Policy including subsequent amendments, (iv) Low BTU Gas Policy and (v) LPG (Production & Distribution) Policy.

However, matters other than the policy and relating to day-to-day affairs of the federal government were being submitted to the federal cabinet and its committees ie, ECC for executive decisions.