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The Oil and Gas Regulatory Authority (Ogra) and the oil industry have concluded a tribunal for a two-year dispute on the structure of the fees that all oil marketing, refining, storage and pipeline companies have to pay.

The two countries signed a license agreement that doubled the license period for oil-related companies from 15 to 30 years, and the annual fee structure was based on market size and output.

Overall, Ogra responded to the demands of the oil industry. The contract is a one-off payment of Rs50 crore (Rs50m), which allows regulators to generate annual sales of at least $ 167 million annually.

The agreement was signed by the Chairman of the Regulatory Authority, two members of Ogra and Dr. Ilyas Fazil, Chief Executive Officer of the Oil Company Advisory Council (OCAC).

Under the agreement, the two sides submitted a joint application to withdraw the case from the industry and before the Islamabad High Court, which Ogra has filed for more than a year. After the court approves, Ogra will officially issue a statutory order stipulating the commission rate.

The two sides are overwhelmed by the 'huge commission' on the downstream oil sector imposed by the Pakistani oil (refining, mixing, transportation, storage and marketing) rules.

OCAC expressed concern and reservations about its fee structure and said it would threaten the viability of the downstream oil sector if not abolished.

The original rules require all refineries, marketing companies and pipeline companies to pay a non-refundable fee of Rs2m for grant renewal, modification, extension, assignment, review, transfer, change, relocation or reissue of licenses that remain valid for 15 years. I asked.

Under the revised rules, the companies will pay a fixed license fee of Rs 2.5 million (instead of the existing Rs2m), regardless of size and sales volume, but the license period will not remain in effect for 30 years instead of 15.

In addition, all companies must pay a fixed annual fee instead of 0.005% of the previously operating amount. Pakistan's state oil must pay up to Rs 24 million a year.

With over 16 million tons of throughput, OMC will have to pay Rs24m, which will be charged Rs 22 million for an annual throughput of 14-16 million tons.

The annual fee for oil marketing companies will gradually decrease by Rs2m each for annual throughput of 2 million tons. SMEs with less than one million tons will pay Rs 3 million a year.

Refineries with a throughput of more than 6 million tons will pay an annual fee of Rs11m, which will gradually decrease by Rs2m per 2 million tons of throughput per year.

Pipeline companies pay Rs 5 million per year for over 6 million tons of throughput and reduce Rs 2 million to reduce the throughput of 2 million tons.

In addition, lubricating oil marketing companies will pay an annual fee of 0.005% of annual sales, while oil blending facilities, lubricants and reclamation facilities will pay Rs 100,000 per year in connection with consumer price increases.

Similarly, the storage facility will pay Rs. 1 million per year and the petroleum test facility will pay Rs. 5 million.

In March 2006, oil regulations in the central and downstream sectors were transferred from Oceans to Ogra, some ministers were retained by the Oil Secretary, some moved to Ogra, and some powers had to be jointly exercised.

Ogra regulated the oil sector, which only provides licenses for the construction of new oil marketing companies (OMCs) and lubricant blending and landfill plants in accordance with Pakistan Oil (Refining, Mixing and Marketing) Rule 1971

In accordance with Article 41 (1) of the Ogre Act, the Regulatory Authority has drafted the rules of Pakistan Petroleum (Refining, Mixing, Transportation, Storage and Marketing) notified in 2016 in consultation with the local government and the Minister of Oil after the 18th amendment. January 22, 2016

Ogra said the new regulation, 2016, will help third parties conduct third-party inspections to ensure the safety / integrity of oil installations and provide equal competition through technical standards enforcement.

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