Wednesday June 29, 2022

Gas allocation is prerogative of federal govt, SHC told

May 10, 2022

KARACHI: The petroleum (exploration and production) policies in 1990's and 2010's, approved by the federal governments, provided that gas allocation as well as purchase of pipeline quality gas will be decided by the federal government, the Petroleum Division secretary told the Sindh High Court on Monday.

Filing comments on a petition regarding lack of provision of welfare funds for the people of oil and gas exploration areas and non-implementation of the Supreme Court of Pakistan’s orders, the secretary submitted that the Petroleum Policy 2012 had been approved by the Council of Common Interests, which provided mechanism for sale and purchase of natural gas in the country. He submitted that the right to make commitments and set precedence of usage of gas remains vested exclusively with the federal government. He said the federal government is exclusively competent to make and revise any policy with regard to natural gas.

He submitted that unlike Article 153, 154, 155, 160 and161 of the Constitution which provides an inbuilt self-adjudicatory and self-executory mechanism, Article 158 speaks of a policy and does not provide guidelines for any such self-executory mechanism as had already been acknowledged by the supreme court in the Gadoon Textile Mills case. He submitted that to meet the internal demand in an economical manner, the federal government approved the Gas Allocation and Management Policy 2005 which provides for priority of gas supply when gas is available as well as load management in case of scarcity of gas in the country.

The court had earlier directed the secretary to file a detailed statement setting out legal basis in which the federal government is exporting gas from Sindh without its consent along with any agreement/direction. The SHC’s division bench, headed by Justice Muhammad Karim Khan Agha, during the previous hearing, had observed that 15 per cent of gas being produced from Sindh, prima facie in violation of Article 158 of the Constitution, is being exported to other provinces despite gas load-shedding in Sindh.

The court, after taking the comments of the ministry of petroleum on record, appointed Makhdoom Ali Khan as amicus curie to assist the court on whether the authority of the federal government taking gas from Sindh without its permission is subjudice before the supreme court and if not whether the federal government has the legal authority to take gas from the province without the permission of the Sindh government. The court also raised a query on the role of the Council of Common Interests in this regard.

The court directed the secretary Energy and the chief secretary to ensure that all relevant deputy commissioners are in attendance and file their reports with regard to utilization of funds given to them by exploration and petroleum companies for the welfare of people living near the gas exploration areas. The court observed that each deputy commissioner shall show that the utilization of exploration and petroleum funds has been carried out in respect of agreed projects as per policy and the secretary Energy shall certify whether the report is correct.

Regarding gasification of villages near gas fields in Sindh, the court was informed that funds have not been utilized due to lack of issuance of tender notices within due time.

The court directed the Sui Southern Gas Company to ensure that tenders are awarded strictly in accordance with the law so that work can be carried out expeditiously prior to the next date of hearing and submit a progress report. The court directed the secretary Finance to ensure release of Rs 660 million to the SSGC for the next financial year for the gasification of villages within two months so that the gasification project of is not further delayed.