OMAP raises legal concerns over OMCs storage facilities

KARACHI: Oil Marketing Association of Pakistan (OMAP) has urged the regulator not to allow any oil marketing company (OMC) to operate a storage facility or depot if their third-party certification was not issued after Oil Regulations 2016.

The OMAP in a letter written to Oil and Gas Regulatory Authority (OGRA) chairman on Wednesday reminded that OGRA had issued a set of storage rules in 2009 to assure safety standard compliance. The OMCs were granted a grace period of five years during which they had to update their storage facilities to the notified standards.

The aforementioned rules apply uniformly to all licensees. New guidelines for the oil industry were announced by OGRA in 2016, and both current and future OMCs were required to get licenses in accordance with those rules, the letter said.

After the new oil rules were put into effect in 2016, OGRA made it a standard operating procedure (SOP) that no storage facility could operate until it had been inspected by an OGRA-appointed third-party inspector and had all necessary NOCs, such as those from the MOD, the DC, and explosive licenses.

Upon fulfilment of the procedures, allocation for retail outlets was also determined when OGRA acknowledged the storage safety standards. For the sole purpose of maintaining the safety of storage facilities, all developing OMCs are subject to these stringent rules and SOPs, the OMAP letter pointed out.

However, it noted that by authorising the operation of a non-compliant storage facility to the so-called major OMCs, OGRA was discriminating against the rising OMCs. “These large OMCs are permitted to operate not just without having to confirm that their storage facilities adhere to the published technical standards, but they are also permitted to assign retail outlets on the basis of such storages,” it said. This was a glaring contradiction,

The allocation of the retail outlet without the third-party examination of the storage facilities was a glaring contradiction on part of OGRA, the association said.

In light of the greater national interest, public safety, and indiscriminate adherence to the law OMAP, as the single representative legal entity for the oil marketing sector, requested to maintain safety and provision of a level playing field. It said OGRA should not permit operation of any storage facility or depot of any OMC whose third-party certification has not been issued following the Oil Regulations 2016.

Also, retail outlets should not be permitted to any non-compliant storage facility that lacks the necessary NOC from the DC, MOD, or the explosive department. The facilities should also have third-party fitness report for conformity with the notified technical standards for oil storage/depot given by OGRA.

OMAP said that the operations of all such outlets that were allowed to operate on the basis of non-compliant storage depots should immediately be revoked to circumvent any grave calamity.