Price enforcement: LPG companies serve legal notice on OGRA

Caution regulator against taking action as matter is in court.

ISLAMABAD:

Liquefied petroleum gas (LPG) marketing companies have served legal notice on the Oil and Gas Regulatory Authority (Ogra) and Ministry of Petroleum and Natural Resources, cautioning that any action against the companies to enforce the price notified by Ogra will prejudice proceedings of the Lahore High Court (LHC).

The marketing companies including Tez Gas, Noor LPG, Sehwan Gas and Petroleum Gas have filed petitions in LHC against Ogra, challenging the fixing of the price. LPG was a deregulated product, therefore, Ogra could not set prices, they argued.

“The matter is sub judice. Next date of hearing is July 17, therefore, any illegal action will have adverse consequences for Ogra and the ministry,” the counsel for the marketing firms said.

“It would be advisable that Ogra should wait for a decision of the court before taking any action,” the counsel said, adding action against the companies would obstruct the course of justice and prejudice proceedings of the court.

On July 13, the petroleum ministry issued a letter to Ogra, asking it to inspect LPG filling plants of marketing companies to address apprehensions of the LPG distributor association, which claimed that the marketing companies were not following the prices notified by Ogra.

“It would be regrettable if Ogra being a regulator becomes a party to paralyse the business of marketing companies by determining the LPG price in blatant violation of the law,” the counsel added.

LPG companies are of the view that local production is insufficient to meet demand in Ramazan while fixing of the import price below cost has made imports impossible. They allege that the distributors are lifting the fuel from companies and are hoarding it to create shortage and take advantage of the situation.

Defending its position, a senior Ogra official argued that the regulator had reacted to the complaint of the LPG dealers’ association chairman, who said the marketing companies were not charging the set prices.

“We then wrote a letter to the petroleum ministry and a team will be formed on Monday to inspect the LPG filling plants of marketing companies,” he said, adding the court had not given any stay order yet.

He stressed that though LPG was a deregulated product, Ogra could intervene in case prices went up to unreasonable levels.

Published in The Express Tribune, July 15^th, 2012.