DRAFT

LIQUEFIED PETROLEUM GAS (LPG)

POLICY, 2021
(VERSION-1)

GOVERNMENT OF PAKISTAN
Ministry of Energy (Petroleum Division)
 LPG Policy, 2021

1. Introduction

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 LPG Policy, 2021

Liquefied Petroleum Gas (LPG) is a colorless and odorless mixture of hydrocarbons (mainly
propane and butane) which is gaseous at normal temperature and pressure, and liquid under
reduced temperature or moderate pressure. A chemical ethyl mercaptan is added to impart a
pungent odor for leak detection. In fiscal year 2019-20, an average of about 2,070 tons/day
LPG was produced domestically contributing less than 1% to the total primary energy supply
mix of Pakistan. LPG is mostly used by the people living in far-flung areas or the localities
deprived of piped natural gas. Currently out of around 33 million households in Pakistan,
only nearly 10 million households are connected to Piped Natural Gas (PNG) network and
the rest are relying on LPG and other commercial and non-commercial fuels like kerosene,
coal, firewood, dung cake, and solar etc. On the other hand, substantial price disparity exists
between LPG and natural gas supplied to the domestic consumers. As per the natural gas
pricing slabs, consumption of 1.77 MMBtu (equivalent to nearly 3.3 LPG cylinders), cost
only Rs. 297 to the domestic consumers whereas equivalent consumption of LPG costs
around Rs. 5,505 as per the LPG price notified by Oil & Gas Regulatory Authority (OGRA)
for June, 2021. This reflects that the people living in remote areas are not only deprived of
cheaper natural gas but to rely on the costlier LPG, which are mainly driven by international
prices.
In June 2000, the Federal Government decided to deregulate the LPG industry with a view to
making it investor friendly, foster healthy competition, improve safety standards, and ensure
better consumer services. Accordingly, in supersession of LPG (Production & Distribution)
Rules 1971, the LPG (Production & Distribution) Rules, 2001, were formulated under which
LPG allocations made by the then Ministry of Petroleum & Natural Resources (MPNR) prior
to deregulation were given protection to the extent of terms of existing agreements between
the marketing companies and producers. These Rules also empower the producers and
marketing companies to fix a reasonable producer price for their product and a retail price,
respectively. After promulgation of OGRA Ordinance, 2002 all LPG regulatory functions as
envisaged in the LPG (P&D) Rules, 2001, were transferred to OGRA in March 2003. The
Government introduced LPG (Production & Distribution) Policy, 2006, with the objective to
streamline its distribution at affordable prices and promoting competition etc. The policy
covered the issues of licensing, safety standards, pricing, import and automobile sector.
Subsequently, the Government introduced LPG (Production & Distribution Policy), 2011,
and 2013, with the objective to increase LPG supplies through indigenously produced and
imported product. However, the LPG prices for domestic consumers remained considerably
high due to deregulated consumer prices, imports not compatible with local LPG, and
overcharging by the marketing companies.
In 2016, MPNR reviewed the issue and concluded that the price deregulation policy has
failed to achieve its intended objective of enhancing availability of LPG at affordable prices.
Accordingly, MPNR formulated LPG (P&D) Policy, 2016 to regulate LPG prices at producer
and consumer levels with the objective of LPG supplies to the consumers at affordable prices.
In accordance with the Policy 2016, upper limit of LPG producer price was fixed by OGRA
based on international prices (Saudi Contract Price).

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Despite regulation of LPG prices at producer and consumer levels, real LPG prices in the
country were driven by international prices and the consumers remained suffering from
frequent price hikes and shortage of supplies besides exploitation by market players.
However, provision of level playing field through fiscal incentives on imported LPG
(removal of regulatory duty, reduction of GST from 17% to 10%) in 2018 resulted in
increased imports, enhanced competition, and expansion in LPG market with increased
supplies across the country at reduced prices.

2. Bottlenecks in the LPG Sector

Frequent price hikes and disruptions in LPG supplies in the country can be linked to various
major factors like lower indigenous LPG production than demand, huge dependence on
imports (over 50%), inadequate storage facilities, import of inferior quality LPG, ineffective
regulatory enforcements, and overlapping functions between policy maker and the regulator.
2.1. Inadequate Indigenous LPG Production
During FY 2019-20, an average production of domestic LPG was around 2,070 Metric Tons
per day (MT/day) with major share from Exploration and Production (E&P) companies at
1,378 MT/day and Refineries at 442 MT/day. To meet LPG demands in the country, nearly
50% of total LPG supplies were imported during FY 2019-20. Indigenous LPG production
may further decrease with decline in hydrocarbon production in the country in the absence of
addition of significant discoveries.
2.2. Inadequate Storage Facilities
The country lacks adequate storage facilities necessary for sustained LPG supplies. Nearly
41,364 MT of storage capacity lies with marketing companies in the country, which is
equivalent to nearly ten days sale quantities (average 3,951 MT/day in FY 2019-20). LPG
marketing companies are required to develop adequate storage facilities in relation to their
sales quantities in accordance with the provisions of license granted by OGRA.
2.3. Import of Inferior Quality LPG
LPG of different qualities is available in the international market with varying prices. LPG
importers, while benefitting from ineffective regulatory enforcement for quality control, try
managing import of inferior quality LPG at low prices which not only distort market
competition but also cause severe health impacts to the consumers.
2.4. Dormant Role of State-Owned Entities (SOEs)

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The role of state-owned entities (SSGC-LPG, PSO, and PARCO) involved in LPG marketing
remained dormant due to various factors including but not limited to thin profit margins
compared to private counterparts, PPRA compliant procurements, frequent and discouraging
interferences of Audit and other investigating authorities, etc. International
suppliers/refineries are always reluctant in locking price (bid validity) for longer period due
to daily price fluctuations in the international market. Existing PPRA Rules 2004 (rule 13 and
35) do not only cause unnecessary delay in the procurement process but also result in higher
price quotations by the suppliers. Compliance to these PPRA Rules makes SOEs
uncompetitive as compared to spot buying by the private importers in the highly volatile LPG
market.
2.5. Ineffective Regulatory Enforcement
OGRA serves as a regulator for the mid- to downstream oil and gas sector including LPG.
However, based on the experience in the LPG market, it remains difficult for OGRA to claim
achieving its intended objectives as per its Ordinance for ensuring competition between the
market players for ultimate benefitting the consumers. Absence of LPG market
intelligence/database, inadequate LPG storage facilities/stocks, frequent demand-supply
imbalances resulting in shortage of supplies particularly in the far-flung areas and price
distortions with substantial room of manipulation by market players to maximize their
windfall profits/ gains are few of the examples of ineffective regulation of OGRA.
2.6. Overlapping Functions between Policy Maker and Regulator
Persistent ineffective regulation of LPG sector by the regulator has had provided room for the
policy maker to involve in the regulatory affairs. Petroleum Division, through a policy maker
with limited workforce and resources, keep trying for smooth functioning of LPG supply
chain for adequate LPG supplies to the consumers with least price distortions: the functions
which were/are otherwise supposed to be performed by the regulator. Functioning of LPG
market requires improved functions and effective performance of policy maker and regulator
simultaneously but with clear demarcation between their roles, functions, and responsibilities.

3. Goal and Objectives

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The goal of this policy includes making LPG fuel as an easily accessible, affordable, and
acceptable for domestic and commercial consumers across the country, especially in the rural,
hilly, and remote localities deprived of piped natural gas through enhanced/reliable supplies
without unjustified price hikes and exploitation by the market players. Achieving these
objectives requires removing the bottlenecks in the LPG sector for promoting healthy
competition in the LPG market and offer necessary fiscal incentives in the LPG supply chain.
Towards market liberalization, Economic Coordination Committee (ECC) decided (case
No.ECC-87/17/2018 dated 17th September 2018) to deregulate prices of LPG. Subsequently,
a committee constituted by Cabinet Committee on Energy (CCOE) (case No. CCE-
39/10/2020 dated 20th June 2020) also recommended for deregulation of LPG prices.
However, upon complete de-regulation of LPG prices, it is perceived that it will be
challenging to keep LPG prices stable unless bottlenecks prevailing in the LPG market are
addressed effectively. Therefore, in order to ensure fair competition in the LPG supply chain
while safeguarding the consumers under de-regulated pricing regime, it will be vital to
enhance supplies (enhancing indigenous LPG production and making LPG imports
competitive/feasible through fiscal incentives), increase storage capacity in the country, and
ensure effective and improved regulatory role of OGRA to minimize/eliminate the
cartelization and exploitation power of market players. Under the prevailing market
conditions, a reasonable price ceiling at producer level will be essential to ensure a fair price
and competition between importers and local producers. Accordingly, in this policy, a
reasonable ceiling price will be set at producer level, to reflect the Import Parity Price (IPP),
whereas consumer price will be de-regulated.
Ever changing market conditions and prices in the international market require special
exemption/relaxation from PPRA requirements (rules 13 and 35) for State-Owned-Entities
(SOEs) to provide them level playing field and enabling their procurement of LPG at
competitive prices within least possible time to meet urgent country’s requirement.
It was also found vital that OGRA plays its enhanced and effective regulatory role to make
LPG supply chain efficient and competitive in line with the objectives stated in its Ordinance
and/or in this policy. For the purpose, OGRA may revise/amend its Ordinance or Rules
wherever required. Coherent efforts of Petroleum Division and OGRA will also be essential
for removal of difficulties/bottlenecks in the LPG sector through effective policy measures
and regulatory enforcements. It will also be vital to clearly delineate the roles, functions, and
responsibilities between policy maker and the regulator to avoid overlapping of functions and
improve overall institutional performance.

4. Production of LPG
4.1. E&P Companies and Refineries
4.1.1. E&P Companies
shall directly or through other companies exercise their rights to set up
LPG extraction facilities at producing fields where LPG can be
commercially extracted as per the development plan approved by the

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Government in accordance with the provisions of the applicable

Petroleum Concession Agreement (PCA) or Petroleum Sharing
Agreement (PSA).
4.1.2. E&P Companies
shall assess and submit a report to OGRA, within a year, for
extraction/production of LPG which is commercially viable, from fields
which are already on production. For new discoveries such report shall be
submitted to OGRA within one year from start of commercial production.
4.1.3. OGRA shall take
necessary measures to ensure extraction of LPG, which is commercially
viable, either by E&P companies or refineries or through third party.
4.2. LNG Import Terminal Operators
4.2.1. All large-scale
LNG import terminal operators/ developers (FSU, FSRU or land-based),
with the exemption of LNG import in containers, shall assess periodically
(every year) the potential of LPG extraction from LNG or RLNG stream.
4.2.2. OGRA will take
necessary measures to ensure extraction of LPG, which is commercially
viable, either by LNG terminal operator/ developer or through third party.
4.3. Network Operators
4.3.1. Network
Operators shall periodically (every 2 years) assess the potential of LPG,
which is commercially viable, from the stream of natural gas flowing in
their respective transmission networks and shall submit to OGRA, a
detailed technical and financial proposals for LPG extraction.
4.3.2. Network
Operators shall submit to OGRA their intention to exercise their right for
extraction LPG through competitive bidding within one (1) year.
4.3.3. OGRA will take
necessary measures to ensure extraction of LPG, which is commercially
viable, either by Network Operators or through third party.

5. Disposal of Indigenous LPG by Producers

5.1. LPG producers can sell partially or wholly their production quantities to their
subsidiary involved in marketing, provided such subsidiary will market and distribute
the entire volumes at its own or through their distributors without resale to any other
MC(s) or distributor(s).
5.2. For the left-over quantities, LPG producers will follow a monthly or quarterly
competitive auction/bidding process to dispose their product to MC(s) having valid
OGRA license.
5.3. OGRA, within three (3) months, will develop pre-qualification criteria, with the
objective of transparent/efficient auction/bidding process while ensuring no
cartelization/hoarding in the market. Pre-qualification criteria shall be followed by all

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the producers for sale of their LPG to MC(s). All producers shall perform such pre-
qualification once a year.
5.4. Invitation to bids will be published in at least one of the top-ranked daily newspapers
(Dawn, The News, Daily Jang) besides sending bid information through emails to all
pre-qualified LPG marketing companies.
5.5. Signature Bonus or similar Premiums shall be discontinued and all producers shall
settle such contracts within six (6) months to move to competitive auction/bidding
process.
5.6. Producer(s) can sell their LPG based on the principle of IPP below a ceiling price.
The ceiling price shall be equal to landed cost (C&F) for imports through sea with
Saudi CP taken as a benchmark. OGRA shall assess and publish C&F price every
month. Custom Authorities shall provide all such information to OGRA every month
as deemed necessary to assess and publish landed cost every month by the later.

6. Marketing and Distribution

6.1. Any company having valid OGRA license and meeting terms of such license can
engage in marketing and distribution of LPG (local and imported) subject to payment
of applicable government duties and taxes.
6.2. OGRA shall review its existing licensing regime/terms within three (3) months to
include clear investment requirement and other necessary conditions for marketing
companies for consolidation of the market.
6.3. LPG Marketing Companies (MCs) shall develop their Distributors’ outlets which
comply with applicable rules and HSE standards.
6.4. For enhanced safety and responsibility, multi-party representation shall not be
allowed instead Distributor(s) shall only represent and sell product of one MC at their
outlet(s).
6.5. MC being a Licensee of OGRA, shall be responsible for observance of all applicable
rules and safety codes/standards at their Distributors’ outlet(s).
6.6. OGRA shall take the following measures:
6.6.1. Make it possible
for sale of LPG cylinders on petroleum filling stations subject to meeting
safety and other necessary requirements.
6.6.2. Register all the
Distributors in the country. It shall be mandatory for MC(s) to get their
Distributors registered with OGRA within six (6) months, meeting
necessary requirements. No sales shall be allowed by any un-registered
Distributors.
6.6.3. Punitive action,
leading to cancellation of registration, against Distributors violating the
rules, involved in un-authorized and hazardous decanting.
6.6.4. May explore
development of a safe decanting equipment that meets necessary safety
standards.

7. Import and Export of LPG

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7.1. Any company having valid OGRA license can import LPG meeting terms of such
license and all other import related requirements and payment of applicable
taxes/duties.
7.2. OGRA shall review its existing licensing regime/terms within three (3) months to
include clear investment requirement and other necessary conditions for LPG
importers for consolidation of the market.
7.3. OGRA shall ensure quality of imported LPG for fair price competition between the
importers and local producers besides avoiding severe health impacts on consumers.
For the purpose, within three months, OGRA shall review to set the benchmark
specification of LPG, develop effective enforcement mechanism, and impose
adequate penalties pro-rate of poor quality below the benchmark specification leading
to cancellation of license for strict compliance and discourage inferior quality imports.
OGRA shall communicate the information, to all their licensees, related to benchmark
specification and related penalties including cancellation of license for engaging in
inferior quality imports.
7.4. OGRA shall assess the demand-supply situation to determine indicative import
requirements and publish monthly market situation. OGRA will allow only pre-
qualified companies to import needed quantities of LPG to meet demand in the
country.
7.5. Export of surplus quantities of locally produced LPG after meeting local demand, if
any, may be allowed by the Federal Government based on the recommendations of
OGRA.
7.6. Re-export of imported LPG through sea will be possible to the extent which is not yet
discharged into the terminal(s) from the sea vessel by fulfilling all related rules &
regulations.

8. Storage Facilities and Stocks of LPG

8.1. OGRA shall review its existing licensing regime/terms within three (3) months to
include clear investment requirements and other necessary conditions for marketing
companies to meet minimum requirement of storage development and maintenance of
stocks.
8.2. OGRA shall ensure development of adequate storage facility and maintenance of
stocks by every marketing company, to minimize chances of supply shortages while
avoiding possibility of hoarding in the country.

9. Relaxation in PPRA Rules for SOEs

To provide level playing field to SOEs, enable them compete in the market, take leading role
to ensure stability in the market, maintain demand-supply equilibrium in the country, and
avoid any product shortages in the high demand season, the following exemption/relaxation
in the PPRA Rules will be available for SOEs:
9.1. For procurement of LPG through international competitive bidding:
9.1.1. SOEs are
exempted from rule 13 to the extent of relaxing the duration of response
time for receipt of proposals or bids from the date of publication of an
advertisement or notice. SOEs may reduce the minimum response time,

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for receipt of bids or proposals from the date of publication of an

advertisement or notice, to seven (7) days instead of thirty (30) days
otherwise required under rule 13(1) of PPRA Rules 2004, subject to the
condition that the Procuring Agency shall ensure publication for the
invitation to Bid in widely circulated Urdu and English Newspapers
besides publication in international fora.
9.1.2. SOEs are
exempted from rule 35 to the extent of ten days period between the
announcement of bid evaluation and award of contract to the successful
bidder. SOEs may announce the results of bid evaluation in the form of a
report giving justification for acceptance or rejection of bids prior to the
award of procurement contract, subject to the condition that fair and
reasonable opportunity shall be provided to the bidders. For clarity fair
and reasonable opportunity means “ensure the healthy competition
amongst the potential bidders and ensure the redressal of grievance of the
aggrieved bidders, if any.

10. Fiscal Measures

LPG is 15-20 times (average notified price of Rs. 3,117/MMBtu during June 2021) costlier
than the cost of lowest slab of natural gas (nearly Rs. 168/MMBtu) supplied to the domestic
consumers. Therefore, it was found expedient/essential to offer fiscal incentives to achieve
the objectives of making LPG fuel easily accessible, affordable, and acceptable. Fiscal
incentives are thought to help improve LPG supply chain through enhanced indigenous LPG
production, development of adequate LPG storage facilities at import terminals as well as
across the country, maintenance of minimum LPG stocks for sustainable LPG supplies at
stable prices to the consumers across the country.
10.1. The following fiscal incentives will be available across the entire supply chain:

Objective Fiscal Incentives

Enhancing indigenous production  Zero import duty and taxes on plants and
machinery for LPG production plants.
 Ten (10) years tax holiday to the producers after
start of commercial production.
Development of storage facilities at  Zero import duty and taxes on plants and
import terminals and across the machinery for LPG storage and bottling plants.
country
Competitive imports for enhanced  Zero advance income tax on imports.
supplies  Ten percent (10%) GST on imported and locally
produced LPG.
10.2. Reasonable Regulatory Duty (RD) shall be applicable on imports through land and
sea routes. The value of such RD shall serve as a balancing number between the
landed costs of imports through sea and land routes and the cost of local LPG
production. OGRA shall determine and notify RD per metric ton every month, which
cannot be less than zero in any event.

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10.3. Reasonable Petroleum Levey (PL) shall be applicable on local LPG to be paid by the
producer(s). The value of such PL shall serve as a balancing number between the cost
of local LPG production and landed costs of imports through sea and land routes.
OGRA shall determine and notify the amount of PL per metric ton every month,
which cannot be less than zero in any event, under Section 3 of “The Petroleum
Products (Petroleum Levy) Ordinance, 1961”. For Delegation of Powers to OGRA
under Section 8 of the said Ordinance, Petroleum Division will notify in the official
Gazette with the approval of Federal Government.
10.4. Custom Authorities shall provide all such information to OGRA as deemed necessary
to assess and notify the amount of RD and PL every month by the latter.
10.5. Producer(s) shall be obligated to deposit the applicable PL notified by OGRA, for any
month, in the account nominated by the Finance Division latest by 7 th day of next
month.
10.6. Non-payment of PL shall attract an interest rate given in Rule 9(3) of Petroleum
Product (Development Surcharge) Rules, 1967. OGRA shall monitor the PL payments
by the producers in accordance with Petroleum Product (Development Surcharge)
Rules, 1967. OGRA shall take punitive action against the defaulter(s) including heavy
penalties or cancellation of license(s).

11. Digitization of LPG Sector

For improved and effective regulatory monitoring and regulation of LPG sector:
11.1. OGRA shall develop, maintain, and update web-based database of entire LPG sector
including but not limited to LPG production facilities, production volumes, import
volumes, import terminals, storage facilities, available stocks, and other necessary
marketing information like consumer price across the country, etc.
11.2. Under OGRA regulatory framework, it will be mandatory for every producer,
importer, terminal operator and MC to update their data on daily basis in the web-
based database developed and maintained by OGRA.
11.3. OGRA shall manage the database Province and District wise in a printable format(s)
for printing of such reports by OGRA itself and Petroleum Division.
11.4. OGRA shall revisit its terms of license that it deems necessary for digitization of LPG
market.
11.5. In addition, all LPG Licensees shall furnish requisite information/data to OGRA as
and when required.

12. LPG Air-Mix Plants

12.1. Due to involved substantial capital cost, recurring subsidies, and decision of the ECC
dated 26th March 2020 (shelve the LPG Air Mix projects), Government will not
commission any new LPG Air-Mix Plant (LPG AMP) in future except those which
are near completion.
12.2. Costs for LPG AMP, owned and operated by state-entities which are already in
operation or nearly completion, shall be recovered/settled in accordance with the
existing framework of weighted average cost of gas (WACOG) already approved by
the Government.

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12.3. The private sector will be free to set up LPG AMP on commercial considerations at
their own costs, and liabilities subject to meeting all necessary OGRA’s licensing and
operational requirements.

13. LPG Supplies to Off-Grid Poor Households

To meet the gas requirements of poor households deprived of PNG, the government may
provide subsidies to the qualifying households, for their buying of LPG at subsidized rates,
living in the areas to be prioritized by the government from time to time based on socio-
economic considerations. Framework for such subsidy program(s) may be developed, as per
the directions of the government from time to time, for the areas to be selected/ prioritized by
the government, based on socio-economic considerations.

14. Regulatory Framework

14.1. OGRA as a regulator shall issue license for LPG Production/Extraction, LPG Air-Mix
Plants, LPG Storage/Filling Plants, LPG Marketing.
14.2. OGRA shall issue a provisional license for an initial period of three (3) years
extendable to other two (2) years. Following the approach of ease of doing business,
OGRA may grant provisional license on meeting the minimum possible requirements
against a minimum possible fee. OGRA, in the provisional license, may stipulate
necessary conditions and requirements, keeping in view the market consolidation, for
necessary infrastructure development during the period of provisional license.
14.3. OGRA shall grant operational license upon its satisfaction of meeting all the
necessary conditions and required infrastructure development by the company for a
period of fifteen (15) years.
14.4. OGRA may either cancel the operational license or impose adequate penalty to the
licensee in case of non-compliance with the licensing terms and conditions.
14.5. OGRA shall conduct Performance Audit within six (6) months, through reputable
third-party(ies), of existing MCs and proceeding for cancellation of license against
non-compliant companies.
14.6. To ensure safety throughout the LPG supply chain i.e. LPG Extraction Plants, LPG
Storage/Bottling Plants, LPG Transporters and Distribution Outlets, the Licensees
will meet the minimum safety standards as set out by OGRA and updated from time
to time.
14.7. Due to lower indigenous LPG production than demand, achieve the objective of
sustainable supplies to the consumers deprived of natural gas, and involved safety
issues, there shall be a complete ban on use of LPG in the automobile/ transport
sector, except for the filling stations which are already operational or OGRA has
issued licenses thereto. Only to the extent of filling stations, which are already
operational or OGRA has issued licenses, prescribed codes and standards of OGRA
for conversion of vehicles to LPG and the establishment of LPG refueling stations for
the automobile sector shall be followed. Compliance certification from Hydrocarbon
Development Institute of Pakistan (HDIP) or any other party authorized by OGRA
shall be required of such equipment(s) in accordance with safety standards of OGRA.
14.8. OGRA shall publish a list of authorized manufacturers for all LPG equipment
including storage tanks, bottling plants, conversion kits, fuel tanks, cylinders, etc.,
duly approved and certified by HDIP or any other party authorized by OGRA. The

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equipment manufactured by the authorized manufacturers shall be verified and

monitored for conformance to the international standards through strict quality control
and quality assurance measures by OGRA.
14.9. MCs shall provide certificates duly mentioning the serial number of their cylinders to
OGRA before 31st December of each year confirming that the cylinders have been
properly tested as per requirement of the LPG Rules/Standards set by OGRA. Further,
it shall be the responsibility of MCs to ensure that their LPG cylinders have been
revalidated as per law after a specific period as determined by OGRA.
14.10. In addition to the functions and roles indicated in this Policy, OGRA shall perform all
such functions which fall under domain of a Regulator in accordance with the
international best practices, including but not limited to the following:
14.10.1. Effective
intervention, through effective hearing process, to settle disputes between
its licensees and between a person(s)/entity(ies) and its licensees relating
to regulated activities.
14.10.2. Effective
interventions, through effective hearing process, for timely removal of
difficulties to ensure business friendly environment, level playing fields,
and competitive market.
14.10.3. Protect the
consumer rights by controlling the artificial shortages, price hikes and
exploitation by the market players, etc.
14.10.4. Necessary anti-
hoarding/anti-cartelization measures.
14.10.5. Ensure quality of
LPG and safety standards at all levels of supply chain.
14.10.6. Effective
measures to control un-authorized decanting of LPG from cylinder to
cylinder.
14.10.7. Take punitive
action against the market players involved in violation of its rules and
regulations, terms and conditions of the license.

15. Demarcation of Functions Between Policy Maker and the

Regulator
15.1. The role of Petroleum Division shall be limited to the core function of macro level
Policy Making to ensure independence of OGRA in its functions and decision making
and that the regulatory process is transparent, fair, and independent of politics.
15.2. OGRA shall play its effective regulatory role and take necessary measures as deemed
appropriate in line with the goals, objectives and principles stated in this policy and its
ordinance.
15.3. OGRA as a regulator shall make and/or amend its ordinance, rules, and regulations,
wherever necessary, in line with the goals, objectives and principles stated in this
policy and/or in connection with individual cases or disputes, in future.

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15.4. The stakeholder(s)/market players shall approach to OGRA for seeking its
intervention, in case of difficulty(ies)/disputes that impede their lawful interest.
15.5. OGRA’s decisions shall be subject to appellate review for its effective performance
ensure that it:
15.5.1. neither exceeds its
legal authority nor violates policies that it is obliged to follow;
15.5.2. acts reasonably
and follow fair and correct procedures.
15.6. An appropriate “Appellate Tribunal” shall be established to enable the aggrieved
party(ies) to challenge the actions and decisions of the regulator.

16. Policy Improvements

16.1. OGRA, based on its regulatory/ market experience and direct interaction with its
licensees, may suggest/ recommend to Petroleum Division for improvements/
amendments in the macro level policy, wherever necessary.
16.2. For the purpose an “LPG Committee” with composition given below shall deliberate
on the suggestions of OGRA and finalize its recommendations for consideration of
the relevant/competent fora. Upon approval from the relevant fora, the Federal
Government may issue specific macro level policy guidelines to OGRA.
Composition of the Committee
i. Secretary (Petroleum Division) Chairman
ii. Secretary (Cabinet Division) Member
iii. Secretary (Finance Division) Member
iv. Secretary (Planning Division) Member
v. Chairperson (FBR) Member
vi. Chairperson (OGRA) Member

17. Applicability and Effect of the Policy

17.1. This policy shall come into force with immediate effect upon notification after
necessary approval of the competent forum.
17.2. OGRA shall amend its Ordinance, rules and regulations as well as Licensing terms,
wherever necessary, to give effect to this policy.
17.3. This policy supersedes all previous instructions, orders, and policies issued by the
Federal Government from time to time in respect of the matters specifically covered
in this policy. Provisions of this policy will prevail, in case of any conflict between
the provisions of this policy and earlier instructions/policy directions.

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