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Energy Law in Pakistan Frequently Asked Questions

Energy law and policy in Pakistan-Basic Institutional Framework

The Federal Ministry of Water and Power governs the electricity policy and the Federal MPNR governs the policy guidelines of the coal, oil and gas sectors. Alternate energy policies are made by AEDB. Within MPNR, Directorate General of Petroleum Concessions (DGPC) awards petroleum exploration and production rights and thereafter regulates petroleum exploration and production operations and marketing and distribution of both crude oil and POL is regulated by Directorate General of Oil. However, gas distribution, pipeline networks, CNG filling stations and coal are not regulated by the MPNR. Oil & Gas Regulatory Authority deals with the affairs of gas distribution, pipeline networks, CNG filling stations and determination of its prices both for producers, distributors and consumers as well. While provincial governments grant coal rights and regulate coal operations. Further, electricity rights are granted and regulated by Private Power and Infrastructure Board (PPIB) and National Electric Power Regulatory Authority (NEPRA), respectively.

The laws enacted by the Pakistani Parliament are administered and implemented by the respective ministries and regulatory authorities created under the provisions of such laws. These enactments empower the relevant ministries and regulatory authorities to make rules, regulations, issue guidelines and enforcement orders. The federal and provincial ministries supervise various departments and agencies created for the regulation and development of the petroleum (oil and gas), power and coal sector. Besides there are public sector companies operating under the administrative control of the federal government which help in implementing the policies of the government and save the interests of the government in various development projects. Besides the sector-specific authorities, there are certain general regulatory authorities set-up for the creation of fair competition in the production, exploitation, transmission, distribution and sale of energy products with a view to paving the way for inducement of foreign direct investment. The Board of Investment, the PPIB, the Alternate Energy Infrastructure Board, the NEPRA, the OGRA and the Nuclear Power Regulatory Authority are some of the examples of institutional and regulatory bodies in the energy sector in Pakistan.

The Government’s regulatory bodies are as follows:

  • Ministry of Petroleum and Natural Resources:
  • Director General (Gas);
  • Director General (Oil);
  • Director General (Petroleum Concessions);
  • Director General Minerals;
  • Alternative Energy Development Board;
  • Pakistan Mineral Development Corporation;
  • Oil and Gas Regulatory Authority;
  • Inspectorate of Mines;
  • Geological Survey of Pakistan;
  • Ministry of Water and Power:
  • Water and Power Development Authority;
  • National Electric Power Regulatory Authority;
  • Pakistan Electric Power Company Limited;
  • Private Power and Infrastructure Board;
  • Pakistan Nuclear Regulatory Authority:
  • Pakistan Atomic Energy Commission;
  • Provincial regulatory bodies:
  • Mines and Mineral Development Departments of all the provinces (Punjab, Sindh, Balochistan and KPK);
  • Thar Coal and Energy Board;

The federal and provincial governments, particularly after the Eighteenth Amendment in the 1973 Constitution, are jointly mandated to legislate on natural resources, its development, and enactment of energy laws and policies. In addition to the federal government, the provincial governments can also legislate on ancillary and incidental matters like safety in storage, transportation and production, avoidance of environmental damages and NEQS enforcement. Regulatory authorities such as NEPRA, OGRA, Pakistan Nuclear Regulatory Authority (PNRA), PEPA and NEQSA are also actively involved in developing regulatory regimes under the authority of the federal government which has delegated its power to them to make regulations and rules for creation of a fair competitive market based environment, with a view to attracting investment and providing better quality service to the consumers by striking a balance among the interests of various stakeholders.

The proposal to integrate all energy related regulatory functions (i.e., oil, gas, coal, mines, electricity and alternate energy) under one unit to be named as Energy Regulatory Authority or Ministry of Energy has been under consideration for long. This would improve coordination among various energy related regulatory authorities, which in turn would increase efficiency in the energy sector.

 

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