Ogra protests media reporting of communication in a letter to refineries

KARACHI: The Oil & Gas Regulatory Authority (Ogra) disapproved the reporting of its correspondences with the refining sector in the print media in a letter of protest sent to the country’s five refineries on Thursday.

Showing its strong displeasure over the printing of news reports related to issues between the regulator and the industry, it said, “This action is highly unprofessional and undermines the cooperative efforts that Ogra consistently extends to resolve issues faced by the refineries,” the letter said.

Ogra added that it has always been committed to supporting the refineries, ensuring the smooth resolution of their challenges through all possible means. “However, the publication of these correspondences, including unwarranted comments, not only disrupts this process but may undermine” the institution’s reputation, the strongly-worded letter of Ogra said, adding that a professional attitude in the future is expected from the industry.

It may be noted that The News reported on June 14, 2024 about the issue pertaining to the import of high speed diesel (HSD) when the refineries, in a letter to Ogra, protested against the approval of HSD imports despite the availability of local HSD stocks.

The regulator stated that sales and imports/production estimates/plans are finalized in the PRM after taking into consideration many variables with the view to build resilience into the national oil supply chain. “However, history has taught us that the plans can go awry and there is a need to continuously monitor and effect changes in the plans when necessitated by material changes in the assumptions used for planning in the PRM,” it said.

Per Ogra, there have been numerous instances where planned imports of OMCs are reduced/cut with mutual consent from the refineries, and other times, imports were allowed to OMCs beyond the initially decided volumes in the PRM. This flexibility is essential to maintain a resilient national oil supply chain and to prevent any potential dry-outs.

OGRA pointed out that GO requested for approval to import 15,000 metric tonnes of diesel in June 2024, and this request was made as the refineries had been hesitant over the last few months to supply products to GO due to disagreements over financial/commercial terms.

Consequently, Ogra, in its previous communication vide letter dated June 4, 2024, also advised the refineries to offer competitive commercial terms to their customers -- OMCs -- to facilitate the finalization of sale-purchase agreements. It is pertinent to mention that in the same month, PSO’s imports of 165,000 metric tonnes were also finalized in the same PRM meeting and the refineries had no issue with the same.

Therefore, it was “surprising to learn from the print media about the refineries’ stance” over the subsequent approval by the authority, Nevertheless, in the July PRM, GO was directed to finalize its agreements with the local refineries as were other OMCs for ensuring local upliftment.Ogra asked the refining sector to enter into agreements with all OMCs, including emerging OMCs, by offering competitive terms.