Oil and gas: Efforts on to snatch powers from industry regulator

Top bureaucrats eying to grab key posts of chairman and member oil.

ISLAMABAD: The civil bureaucracy close to the power corridors has become quite active to take over control of the Oil and Gas Regulatory Authority (Ogra) and make it a regulator that lacks vital decision-making powers.

In its bid to serve vested interests, the bureaucracy is earning a bad name for the government not only at the domestic level but also on the international stage where investors lose trust in a country where the oil and gas industry regulator is effectively dysfunctional.

Two top officials, close to the Prime Minister’s Office who are going to retire in October and November this year, are eying to grab the post of chairman and member Ogra. This was the reason why Ogra Chairman Saeed Khan was sent on forced leave – a first step before he is shown the door.

A reference has also been filed against Khan in the Federal Public Service Commission accusing him of being involved in the petrol shortage that hit Punjab in early January.

After a single-bench of the Islamabad High Court (IHC) suspended the government’s decision that had sent Khan on forced leave, the executive director of Ogra sealed his office in an attempt to prevent him from resuming duties. The government also appealed against the ruling in the IHC.

In another major step taken to force Khan to leave the office, Ogra a couple of days ago took back cars, the driver and guard from the chairman.

In his absence, the government has made Cabinet Secretary Babar Yaqoob as the acting chairman and has also placed Additional Cabinet Secretary Khusro Pervez Khan in the regulator to complete the quorum. The cabinet secretary has now been given the charge of election commission.

Officials familiar with the developments say Javed Aslam, Secretary to the Prime Minister, is lobbying to become the Ogra chairman after retirement in November. Khusro Pervez is a potential candidate for the slot of member oil after retirement in October.

This is how the government is running the affairs of the regulator, which is supposed to safeguard consumer interests and give a boost to the oil and gas industry.

LNG imports

At present, the government is striving to import LNG to tackle the energy crisis and reduce outages to the minimum. In this business, the role of regulator is very important as the private sector has already imported one cargo and another is set to reach in the middle of this month.

The government has decided to set aside the third-party access rules framed by the Pakistan Peoples Party (PPP) during its 2008-13 government for LNG transmission charges. At present, there is no mechanism in place and it is looking at Ogra for setting the tariff for LNG transmission to different consumers.

Apart from this, the government has issued policy guidelines to Ogra for providing certain incentives to gas utilities to bail them out of financial trouble. But the guidelines, approved by the Economic Coordination Committee (ECC), have not been implemented because Ogra lacks the strength required to take decisions.

Utilities have failed to make public their accounts for a couple of years and are facing losses due to delay in increase in gas prices. Shareholders have also lost interest in these companies. The oil and gas industry needs huge investment to tap hydrocarbon reserves to increase production and bridge the shortfall. However, the government’s intervention has hampered the regulator’s work, which is only monitoring oil prices.

Decisions of choice

Now, attempts are being made to appoint government officials in Ogra in order to implement the decisions of choice.

In the previous government, it was mandatory to get the ECC decision endorsed from the cabinet, but in the present administration it is not necessary to seek the cabinet’s nod. Finance Minister Ishaq Dar, who is also the ECC chairman, wields power to take decisions irrespective of the cabinet’s concerns. So, efforts are being made to take full control of Ogra. Not only this, attempts are also being made to amend the law and make the National Electric Power Regulatory Authority (Nepra) toothless. In defiance of the ECC’s decision, Nepra, which has representation from provinces, has refused to pass on the burden of power theft worth billions of rupees to honest consumers.

the writer is a staff correspondent

Published in The Express Tribune, April 6^th,  2015.

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