Senate Panel Directs Forensic Audit of IPPs

Staff Report:The Senate panel on Friday directed a forensic audit of Independent Power Producers (IPPs) and asked for providing a list of their owners. The Senate Standing Committee on Cabinet met on Friday and questioned the National Electric Power Regulatory Authority (Nepra) about agreements with IPPs. They mandated a forensic audit of these power plants.IPPs’ Lower upliftment of furnace oil causes refineries stocks crisis

The cabinet committee also directed the power regulator to provide a list of the owners of these power plants, who were reportedly earning trillions from consumers each year without producing electricity.

In a presentation to the Senate Standing Committee on Cabinet, the Chairman of the Oil and Gas Regulatory Authority (OGRA) stated that draft agreements with Attock Refinery Limited (ARL) and National Refinery Limited (NRL) had been finalized to upgrade their plants at a cost of $1.3 billion. Agreements with PARCO and Cynergico, totaling around $1.4 billion, are also being finalized.

He explained that OGRA is responsible for determining the revenue requirements of natural gas utility companies (i.e., SNGPL and SSGC), setting their UFG benchmarks, formulating and enforcing rules and regulations, and monitoring their performance and service standards. OGRA also oversees their safety awareness campaigns.

So far, OGRA has issued 202 licenses in the oil sector, including 5 refineries, 42 Oil Marketing Companies (OMCs), 3 oil storage companies, 2 pipeline companies, 80 lube blending/reclamation plants, and 70 lubricant marketing companies.

In the natural gas sector, OGRA has issued 43 licenses, including 6 integrated licenses, 15 transmission licenses, 16 natural gas/RLNG sale agreements, and 6 flare gas sale licenses.

In the LPG sector, OGRA has issued 364 licenses, including 11 LPG producer company licenses, 320 LPG marketing company licenses, 22 auto-refueling company licenses, and 8 LPG air mix plant licenses. Additionally, 3 import terminal licenses are under construction. In the LNG sector, 2 regasification unit licenses have been issued and are operational. In the CNG sector, 920 CNG stations are operational.

In the last three years, OGRA has received 7,877 complaints, of which 6,205 have been resolved, providing relief of 121.32 million to complainants.

In the oil logistics sector, an investment of Rs. 38 billion has been made under the Government of Pakistan’s investor-friendly policy. Licensed OMCs have completed and commissioned new oil storage facilities with a capacity of around 544,570 metric tons (362,538 metric tons of petrol and 182,032 metric tons of diesel) with an investment of around Rs. 38 billion. This has strengthened the National Oil Supply Chain (NOSC).

An investment of USD $4-5 billion has been made in the upgrading of refineries. To increase local production, OGRA has executed an agreement with Pakistan Refinery Limited (PRL) to upgrade its existing plant in Karachi at a cost of $1.8 billion.