Ogra fines PSO Rs5m for keeping adulterated diesel

PSO to challenge decision

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has swung into action against Pakistan State Oil (PSO) for having the adulterated High Speed Diesel (HSD) in its depot at Faqeerabad and to this effect the regulator showed its strong muscle exposing the state owned oil marketing company to a penalty of Rs5 million.

In its letter written June 27 to Managing Director PSO, the regulator tells in plain words that PSO has been proven to be involved in having off-spec (adulterated) high speed diesel in its depot at Faqeerabad owing to which the government owned oil marketing company has been exposed to financial penalty.

The official documents also unravels that PSO has been asked to positively deposit the said amount of Rs5 million in the form of bank draft or pay order payable in Islamabad in favour of Ogra within 30 days.

The letter mentions that Pakistan State Oil is a licenced oil marketing company operating under Ogra Ordinance and  is supposed to market petroleum products conformed to the specifications approved and notified by government of Pakistan.

The official correspondence of Ogra to PSO Managing Director also unfolds that Hydrocarbon Development Institute of Pakistan (HDIP) which is being the third party inspector undertakes quality sampling of POL products at all OMCs oil depots on bi-annual basis.

And in a latest development, HDIP found the adulterated diesel at Faqeerabad depot and reported to Ogra asking for required action against the PSO that holds 65 percent of market share.

According to the official document, HDIP in its report dated February 16, 2016 informed the regulator about sample of the off-spec high speed diesel due to lower flash point at 35 centigrade degree than its minimum approved limit at 54 centigrade degree collected at Faqeerabad depot of Pakistan State Oil.

PSO, then, was served with show cause notice on March 02, 2016 and in return, PSO argued again against the test results of the sample which is why HDIP was asked to test the second retained sample through their lab at Karachi in the presence of representative of Pakistan State Oil.

As per the HDIP’s report for second retained sample, HSD was again found adulterated as the sample was found non-conformed with the required specifications approved and notified by the government of Pakistan.

And Ogra keeping in view the findings of HDIP about sample of HSD gathered from Faqeerabad depot in exercise of the power conferred under rule 44 of Pakistan oil rules 1971 and under section 6(2) (p) of Ogra ordinance has imposed penalty of Rs 5 million on breach of rule 43 of the said rule.

However, Pakistan State Oil has decided to contest the test results of second retained sample arguing the seal of the sample was found tempered with, which is why the representative of PSO did not sign the report of HDIP.

Top official of PSO, Khawar Abbas Jillani, said that PSO would again request HDIP to go to Faqeerabad depot and get the sample of HSD from the old stock and in the presence of its representative test the sample and whatsoever result will be is to be accepted by state owned oil marketing company. Jillani says that PSO itself has the laboratory which says that HSD’s quality is up to the mark.