Merging power and oil regulators


WEB DESK: The Planning Commission has reportedly recommended to the federal cabinet to merge the power and oil regulators thereby ensuring that one regulator oversees the entire energy sector. There is obvious merit to this proposal as it would enable Oil and Gas Regulatory Authority (Ogra) and National Electric Power Regulatory Authority to synchronise their decisions that are at present quite inexplicably taken separately.

However, for this recommendation to be successful it is equally relevant to merge the two ministries that are at present operating in the energy sector – the Ministry of Water and Power and the Ministry of Petroleum and Natural Resources. And what has been patently evident during the third tenure of the Sharif administration is the visible engagement of the Chief Minister Punjab in matters relating to energy and in this context spats between the Minister of Water and Power Khawaja Asif and Chief Minister Punjab Shahbaz Sharif have also surfaced.

It may be recalled that the PML-N’s 2013 election manifesto envisaged the merger of the two ministries as an integral component of the party’s objective to deal with the multi-dimensional energy crisis. The document argues that this would “require effective and sustainable solutions through short-term measures and medium-term plans that must be undertaken in a co-ordinated manner; not just plan to fill the gap of 6000MW capacity that exists today, but plan for the increased demand that our growing population and growing economy will generate. PML (N) will take the following decisive steps to resolve the energy crisis: Creation of a Ministry of Energy and Natural Resources through the merger of ministries of Water and Power and Petroleum and Natural Resources. It is unfortunate that nearly two years and eight months after the party was elected to power, this manifesto promise, that analysts maintain was a factor in the party’s electoral victory, remains unfulfilled.

The Sharif administration has appointed two ministers and two ministers of state for these two ministries with periodic reports indicating that contrary to the manifesto promise, plans are not being undertaken in a “co-ordinated manner”.

The PML-N manifesto also sought to eliminate the circular debt; however, the Sharif administration retired a whopping 480 billion rupee debt on the second-last day of fiscal 2012-13. This was a deliberate move to lay the consequent rise in indebtedness on the outgoing PPP as well as the caretaker administrations, mistakenly assuming that no one would be the wiser. A recent Auditor General of Pakistan’s report declared this payment as non-transparent and illegal.

The Petroleum Ministry has proposed that the responsibility of maintaining adequate fuel supply be transferred to the regulator (Ogra), the planning ministry rightfully is of the view that this responsibility should remain with the administrative ministry but has suggested further discussions on this issue with all stakeholders. It may be recalled that the severe shortage of petroleum in Punjab early last year led to several dismissals in the Petroleum Ministry and Pakistan State Oil (PSO). Ignored was the PSO’s then chief Janjua’s contention that blame must be attributed to the Ministry of Finance for failure to release funds as was the practice in the past in spite of several epistles informing the Ministry of Finance of its liquidity crisis that disabled it from opening letters of credit. The proverbial axe, however, fell not on any of the cabinet members but on bureaucrats and technocrats.

It is extremely unfortunate that several of the positive proposals that were contained in the PML-N manifesto remain unfulfilled to this day. Analysts are agreed that if the administration decides to adhere to its own manifesto many of the existing socio-economic problems would begin to be dealt with in a holistic manner.

Source: Business Recorder