Oil and Gas Regulatory Authority (OGRA) has been asked by the Ministry of Energy to cancel provisional licenses of 36 Oil Marketing Companies (OMCs), Business Recorder reported on Tuesday.
The licenses are being cancelled because the OMCs failed to meet the prescribed conditions. At the moment, 66 licensed OMCs are operating in the country, with the top eight companies holding nearly 92 percent of the market share, the news report said.
The 36 OMCs in concern reportedly failed to build storages after obtaining licenses, which is a requirement under the agreements. They also only traded in Iranian diesel allegedly and are therefore being issued a final notice for closure.
A few other OMCs have also shown lethargy in building the required infrastructure. These companies are lagging and have little progress to show. However, the authorities have given these companies a deadline of a year.
Earlier this year in March, the Cabinet had directed the Petroleum Division to strengthen control over the OMCs and fuel stations and initiate required administrative and legal reforms. The latest order for revoking licenses comes as part of that increased authority given to the ministry to implement necessary actions to keep OMCs under check.
During the 2020 petrol crisis in the country, the inquiry commission on OMCs had said that unlawful operations of private storage companies, joint ventures, and hospitalities among OMCs, and violation of licensing conditions, were some of the reasons for the petrol crisis.
The Commission then recommended punitive and departmental action against officials responsible and issued orders for the revitalization of the role of DCs to inspect the stock of OMCs and cancellation of provisional marketing licenses, and development of strategic storage.
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