Senator Umer Farooq chairs meeting of Senate Standing Committee on Petroleum

ISLAMABAD, Oct 01 (SABAH): The Senate Standing Committee on Petroleum convened on Tuesday under the chairmanship of Senator Umer Farooq at the Old PIPs Hall, Parliament Lodges. 

The committee examined the delays in the gas supply project for Gulistan Tehsil in Qilla Abdullah, noting that the project was inaugurated in 2015. Senator Abdul Shakoor Khan highlighted that a 5 km area was excluded from the plan, preventing the project’s initiation. The Director General of Gas stated that the project has an allocation of Rs 500 million, with plans for a 22 km gas pipeline.

Senator Munzoor Ahmed pointed out that the project’s progress has been hindered by a distribution ban, to which the Secretary of Petroleum responded that restrictions on additional connections have been in place since 2021. He emphasized the need for a comprehensive briefing on gas policies, noting that such restrictions are common globally. Senator Abdul Shakoor Khan expressed concerns that villages along the pipeline route are not receiving gas.

Senator Qurat-ul-Ain Marri suggested implementing a policy to provide gas to areas adjacent to the pipeline, and the committee chair agreed that the gas connection policy requires revision.  

The committee also addressed the proposed privatization of the Pakistan Mineral Development Corporation (PMDC). Senator Munzoor Ahmed raised concerns about the potential loss of 5,000 jobs post-privatization, questioning whether PMDC is operating at a loss and asserting its profitability. He opposed the privatization move, stressing that local employees should be prioritized. The Petroleum Authority clarified that the government has categorized privatization under the relevant act, and the Secretary reported that the SOES Act 2023 includes PMDC in the second privatization category, with PMDC having been profitable for the last three years. The cabinet had decided to add PMDC to the privatization list, with its shares wholly owned by the Federation. 

Senator Manzoor pointed out that the Federation does not own the land outright but holds it on lease. Concerns were raised regarding PMDC’s outdated methods and machinery, alongside reports of 80 fatalities over five years. Senator Qurat-ul-Ain Marri questioned how the Federation could privatize land belonging to the province without consultation. The Secretary of Petroleum clarified that only the corporate entity is being privatized, not the leases, and asserted that clarity would emerge once a financial advisor is appointed. Ultimately, the Senate Petroleum Committee rejected the PMDC privatization proposal. 

Additionally, the committee discussed dealer margins and operational policies for petroleum dealers. Representatives noted that banks deduct fees from fuel sales; for example, an 80 paisa deduction occurs for every Rs 100 in sales. The Chairman of OGRA confirmed that OGRA is responsible for calculating costs and margins for Oil Marketing Companies (OMCs) and dealers. He noted that credit card deductions are matters between dealers and banks. The committee directed the Petroleum Dealers Association and OGRA to collaborate to resolve these issues, reiterating that last year, the dealers’ margin was set at Rs 8.64, which included franchise fees.