ISLAMABAD - The federal government has finally agreed to provide MP-2 salaries to the provincial directors deputed in Director General Petroleum Concessions (DGPC).

The federal government also directed the provincial government of Khyber Pakhtunkhwa and DGPC to make guidelines/mechanism for the sale of seepage oil and gas in the KP. The decisions were taken in a meeting of the anomaly committee held here. 

The anomaly committee was constituted to remove the anomalies and difficulties faced by the provinces in the implementation of 18 amendments in the oil and gas sector. The committee consisted of the Federal Minister of Petroleum and Natural Resources, Deputy Chairman Planning Commission, Secretary Finance, Director General of Petroleum Concessions, provincial energy secretaries and other concerned officials. The meeting of the anomaly committee held aimed to address the grievances of the provinces regarding the non-implementation of Petroleum Policy 2012 clause for Re-organisation of Directorate General of Petroleum Concessions (DGPC).The meeting also discussed sale of the seepage oil and gas by KP.

The provinces were demanding MP-1 salaries for their directors but were told that the federal government can only give them MP-2 salaries,” official sources told The Nation here Tuesday. Management Position (MP) scale is special salary package and perquisites given to the officers working in public department on contract basis/special assignments. The government has refused to offer MP-1 pay scale to the provincial directors as usually this pay scale is being offered to MDs, CEOs and other high officials, the official said.

Regarding the pay of provincial directors, it was decided that in case the provincial representative in DGPC is a government official he will just get deputation allowance but if he/she is not the government official then they will get 2,50,000 per month, the official added.

The government has so far failed to implement the more important clause of the Petroleum Policy 2012.  Although Sindh and Khyber Pakhtunkhwa have appointed provincial directors but DGPC was not paying their salaries and they were working without any payment for the last 14 months, he added.

Giving details about the issue, the official said that Article 172(3) of the Constitution inserted in the Constitution of Pakistan through Constitution (18th Amendment) Act 2010, defines the ownership of Provinces and Federal Government in Mineral Oil and Natural Gas. According the petroleum policy, ”Subject to the existing commitments and obligations, mineral oil and natural gas within the Provinces or the territorial waters adjacent thereto shall vest jointly and equally in that Province and Federal Government”.   

In pursuance of Article 172(3) the Council of Common Interest (CCI) approved Petroleum Policy 2012 formulated by Ministry of Petroleum. The said policy calls for Reorganisation of Directorate General of Petroleum Concessions (DGPC).

According Clause 1.3.6 (policy objectives) of Petroleum Policy 2012: “To enable a more proactive management of resources through establishment of a reorganised Directorate General of Petroleum Concessions (DGPC) comprising a federal and provincial representative with Federal Director as ex-officio Director General and providing the necessary control and procedures to enhance the effective management of Pakistan’s petroleum reserves”.

Regarding the payment of salaries to provincial directors, the official said that according the Petroleum Policy 2012 that provincial directors and CFO shall draw their pay from a separate fund to be established at DGPC. Finance Division has also made it clear that the said fund has to be established by the Petroleum Ministry. The decision about salaries, to the provincial director, will take effect from October 2016.

Regarding seepage oil sale, the official said that earlier this year the federal government has issued NOC to the Khyber Pakhtunkhwa Oil & Gas Company Limited (KPOGCL) to supply 25,000 litres per week of Qamar Dhok crude oil (surface seepage) to Attock Refinery Limited.

The official said that KP can provide up to 40,000 liters per day of seepage crude to the refinery. 25,000 litres per week is equal to 157 barrels but the province has the capability of selling 252 barrels of seepage crude a day, the official claimed.

The federal ministry of petroleum and natural resources has asked the Director General Petroleum Concession to provide the price mechanism and guidelines for the crude oil sale.

In oil producing areas of KP the locals have installed more than a lot of wells and they are extracting seepage oil. The official said that the crude oil extracted daily by residents is being sold in market at cost at cheaper rates. The crude oil is being used for operating the electric generators and other vehicles.

Besides, there is gas seepage in Landi Kotal Bazaar located approximately 38 km north of Peshawar. In Dara Bain, located in District Tank, gas seepage is occurring from centuries, the official informed. This is an active gas seep and the gas is used by local shepherds for cooking and heating purposes. Similarly there are other gas seepages spotted in Kojha Kalaa of Bannu district, Barganath Nala 3 kilometer from Waziristan border, and Azakhel in District Nowshera.

But the provincial government didn’t get any guideline from the federal government for the sale of seepage oil and gas. Now both the DGPC and KP government will set together to evolve a mechanism for the sale, the official said.