Nadeem Babar Special Assistant to Prime Minister (SAPM) on Petroleum has told the media that PTI government has prepared a new petroleum policy. He said that focus of new policy is to make business easier under ease of doing business roadmap.
He criticised the previous government for ignoring the much needed policy reforms in petroleum sector. He said that “Unfortunately, during the last 10-20 years efforts have not been made to resolve the problems. Rather new laws and regulations were introduced for temporary solution of the issues, which in the long-run created hurdles in smooth petroleum sector activities”.
He said it will take time to implement the policy reforms, so the government in short term is focusing on making the investment easier and attractive in this sector.
Here are some salient features of new petroleum policy.
A prudent strategy has been devised to increase investment in petroleum sector. Under the strategy, new players would come in the petroleum sector and the inefficient would have to quit. An environment of competition would be ensured, ending the monopoly of individuals.
The petroleum sector has been divided into five key areas – oil and gas exploration and production (E&P), refining and marketing, pipelines and gas distribution, liquefied petroleum gas (LPG) and liquefied natural gas (LNG).
27 new exploration blocks have been identified after conducting a detailed survey in potential areas of hydrocarbon reserves, for which international auction process would be initiated in December this year and completed in three rounds.
Removing bureaucratic hurdles
In the new policy changes have been made to facilitate new companies in the E&P sector, abolishing 10 unnecessary steps, out of 24-30, required for getting approval for drilling activities in potential areas. There will be a certain time limit for approval at each step, and if no response is given, the case will be moved to the next stage automatically.
In the refining and marketing sector, there are some 17-25 steps to set up a petrol station. Out of which, only six to seven steps including approval from the Environment Protection Agency (EPA), the Oil and Gas Regulatory Authority (Ogra) and concerned explosive department were necessary. The steps have been brought down from 14-19 to 5-6 to set up oil storage facilities in different areas.
Incentives for investment
There are some small and old fields from where E&P companies had stopped extracting gas due to high cost. “Now the government has planned to give incentives in this area so that domestic production of the gas could be increased to some extent instead of importing LNG at higher rate.
Three oil refineries, out of five existing facilities, are inefficient, and the government has announced a 10-year tax exemption for them to increase their capacity. The given concession would also be applicable for new deep conversion oil refineries.
The investment strategy has been devised to create more jobs and business opportunities. The main aim of providing incentives to investors is to provide jobs to educated youth. The increased investment will not only create jobs but also increase business activity.
On line complaint system
New system to launch on line complaints for consumers is under process and will be launched in November this year. Mobile App and Web Portal would be launched to facilitate gas consumes to lodge their complaints, which could be operated using consumer identity number. It will become easier for consumers to launch complaints.
Consumer awareness campaign
In September, a campaign would be launched to create awareness among consumers about conservation of gas and avoid excessive billing during the peak winter season. The consumers will be educated that a geyser and heater consumes how much gas during 24 hours. The citizens would be helped in installing efficient appliances and equipment to save the commodity.
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