Senate body on petroleum rejects PMDC privatization

October 02, 2024 (MLN): The Senate Standing Committee on Petroleum on Tuesday rejected the proposed privatization of the Pakistan Mineral Development Corporation (PMDC), voicing concerns over potential job losses.

Chaired by Senator Umer Farooq, the committee warned of the risk to 5,000 jobs if privatization proceeds, as APP reported.

Senator Manzoor Ahmed questioned the need for privatization, asserting that PMDC has been profitable over the past three years and urging the government to prioritize local employees.

He argued that the corporation should not be privatized if it is not incurring losses.

In response, the Petroleum Authority clarified that PMDC’s inclusion in the privatization list aligns with the SOES Act 2023, and the decision was made by the cabinet.

The PMDC remains fully owned by the Federation, although concerns were raised by Senator Ahmed, who pointed out that the land was leased rather than owned outright by the Federation.

He also highlighted the need for modernization of PMDC’s outdated machinery, which has contributed to 80 fatalities over five years.

Senator Qurat-ul-Ain Marri raised the issue of provincial consultation, questioning how the Federation could privatize land belonging to the provinces without their input.

The Secretary of Petroleum clarified that only the corporate entity, not the leased land, was being privatized, and that further clarity would emerge once a financial advisor was appointed.

The committee also reviewed delays in the gas supply project for Gulistan Tehsil in Qilla Abdullah, which was inaugurated in 2015.

Senator Abdul Shakoor Khan pointed out that a 5 km area was excluded from the project, preventing its initiation.

The Director General of Gas informed the committee that Rs500 million has been allocated for a 22 km gas pipeline, but progress has been hindered by a ban on additional gas connections imposed since 2021.

Senator Manzoor Ahmed raised concerns about villages along the pipeline route not receiving gas. In response, Senator Marri suggested implementing a policy to prioritize gas provision to areas adjacent to pipelines.

The committee chair agreed that the gas connection policy required revision.

It also discussed dealer margins and operational policies for petroleum dealers. Representatives highlighted that banks deduct fees from fuel sales, such as 80 paisa for every Rs100 in sales.

The Chairman of OGRA explained that while OGRA sets margins for Oil Marketing Companies (OMCs) and dealers, credit card deductions are a matter between dealers and banks.

The committee directed the Petroleum Dealers Association and OGRA to collaborate to resolve the issues, noting that the dealer margin had been set at Rs8.64 last year, which included franchise fees.

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