OIL AND GAS REGULATORY AUTHORITY

Concept, Organization, Role & Working

Civil Service Academy

Lahore
December 10, 2014

REGULATORY REGIME CONCEPT

Role of Government
Liberalization
Public private partnership
Privatization
Deregulation

Foreign investment
Private institutional
Sustainable economic growth
Competition
Jobs
Poverty alleviation
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Organogram

Chairman
Member
(Oil)

Member
(Gas)

Member
(Finance)

Senior Executive Director

Executive Director
Joint Executive Director
Deputy Executive Director
Assistant Executive Director
Support staff
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OGRA Ordinance 2002

Autonomous
Independent
Exclusive powers
Policy guidelines (GoP)
Midstream and downstream
Foster Competition
Foreign Direct Investment
Level playing field
Protect Public Interest
Effective & Efficient Regulation
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Regulated Activity
Section 2 (xxxii) - Regulated activity means an activity requiring
a license under the Ordinance
Oil

: Pipelines, refineries, storages, lube oil blending

plants and marketing of petroleum products
Natural Gas: Pipelines, transmission, distribution, sale/
storage
CNG
: Storage, filling / distribution
LPG
: Production, storage, filling, marketing /
transportation / Setting up of LPG Refueling
Stations
LNG
: Construction License / Receiving
Terminal, Operations, Sales and Marketing
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5 (1)

OGRA notify and monitor:

Wellhead Price
Prescribed Price of natural gas
Consumers price of gas (GoP advice)
CNG Consumer price
LPG?
Enforcement of performance / technical / safety and service
standards

FIXATION OF WELLHEAD PRICES

HISTORICAL PERSPECTIVE
1985 1991 :
(HSFO) less

66% of High Sulphur Fuel Oil

negotiated discounts

1991 1992 :
discounts

57% of HSFO less negotiated

1992 1993 :
discounts

100% of HSFO less negotiated

5 (2)

1994 onwards : Zone-wise gas prices indexed to

the
basket of crude oil prices
with progressive
capping / sliding discounts.

Natural Gas Pricing

5 (3)

Determination of the revenue requirement / prescribed

price :
Cost of Gas (Producers Price)
Transmission & Distribution Cost
Return on Assets
UFG Benchmark
Consumer price
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Determination Estimated
Revenue Requirement For FY
2014-15

CNG Pricing

5 (6)

Cost of Gas
Value Added Compression cost
Operating Expense
Owners margin
Gas Infrastructure Development Cess
Sales Tax
Consumer price
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5 (7)

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GoP approved Ex-Depot Pricing Formula

5 (8)

a. Ex-Refinery/Import price: linked with PSO actual import cost

and prevalent international Arab Gulf prices during the
pricing period as published by Platts Oilgram
b. Inland Freight Equalization Margin (IFEM), as computed by
OGRA to keep the ex-depot prices uniform upto 22 oil
storage depots of OMCs spread across the country.
c. OMC Margin have been fixed by ECC as follows: MOGAS Rs.
2.35/ ltr, HOBC Rs. 1.72/ ltr, KERO Rs. 1.58/ ltr, LDO Rs. 1.61/
ltr and HSD Rs. 2.35/ ltr.
d. Dealer Margin have been fixed by ECC as follows: MOGAS Rs.
3.08/ ltr, HOBC Rs. 2.15/ ltr, and HSD Rs. 2.60/ltr.
e. Petroleum Levy under Petroleum Product (Petroleum Levy)

Ordinance 1961.
f. Depot price before General Sales Tax (GST) (a+b+c+d+e )
g. General Sales Tax @ 17% of (f)
h. Ex-Depot Sale Price (g)
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Legal Framework

Pakistan Petroleum (Refining, Blending and

Marketing) Rules 1971
CNG (Production & Marketing) Rules 1992
LPG (Production & Distribution) Rules 2001
Natural Gas Licensing Rules 2002
Natural Gas Tariff Rules 2002
Budget Committee Rules 2004
OGRA LNG Rules 2007
Natural Gas Well head Price Rules 2009
Natural Gas Regulated Third Party Access Rules 2012
Pakistan Oil Rules, 2009 (Pending with Federal Government)
OGRA Natural Gas Theft Control Rules, 2011
OGRA (Fines and Recovery) Rules, 2009
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Quasi-judicial Role

Designated Officer
Appeal Authority
Review Authority
High Court

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Licenses
LNG
CNG
LPG Producers & Marketing Companies
LPG Construction License for Re-fueling
Stations
License for LPG Auto Refueling Stations
LPG Construction License for Storage and Filling Plants

Oil Refineries
Oil Marketing Companies
Lube Oil Blending / Reclamation Plants
Lubricant Import Companies

06
3573
109
72
06
35
5
23
80
90
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Financial Resources & Budget

Self financing through collection of fees and
charges from the licensees
Budget Committee Rules 2004
Accounts subject to audit by independent firm of
Chartered Accountants as well as the Auditor
General of Pakistan
OGRA Financial Regulations 2005
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Supply / Demand of gas

10

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Way Forward
1.

Conservation--- a national strategy

2.

Allocation of gas to most efficient sector

3.

Reduction in losses in transmission / distribution

4.

Import of gas --- LNG, IP, TAPI

5.

Increased efforts to enhance indigenous natural gas through intensified

exploration efforts

6.

Pakistan is # 9 in Shale gas reserves in the world. The technology is

expensive but it will pay off all expenses at the end of the day. It is very
important that we must explore this area as early as possible

7.

We must go for alternate energy sources; solar, wind, coal, biogas and
nuclear to lessen burden on natural gas
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