Legal Advice on Obtaining a CNG Licence in Pakistan

The regulation of the Compressed Natural Gas (CNG) sector in Pakistan is overseen by the Oil and Gas Regulatory Authority (OGRA) under the OGRA Ordinance, 2002, and the CNG (Production and Marketing) Rules, 2002. This comprehensive guide provides detailed information on how to obtain various licences within the CNG sector, including new licences and renewals for existing CNG marketing licences.

Categories of Licences

OGRA issues several types of licences in the CNG sector, including:

• New CNG Licence (RLNG Basis)
• Renewal of Existing CNG Marketing Licence

Checklist for Obtaining a New CNG Licence

To obtain a new CNG licence, the following steps and documentation are required:

1. Application Form:
   • A filled application form, complete in all respects, in the prescribed format.
2. Licence Fee:
   • A Pay Order/Bank Draft of Rs. 25,000/- in favour of OGRA, Islamabad, payable at any bank in Islamabad (original).
3. Third Party Inspector (TPI) Site Verification Charges:
   • A Pay Order/Bank Draft of Rs. 20,000/- in favour of OGRA, Islamabad, payable at any bank in Islamabad (original).
4. Proof of Registration:
   • Proof of registration of the company or firm under the Company’s Act or a partnership deed.
5. Proof of Site Acquisition:
   • Documents showing proof of site acquisition.
6. Financial Competence:
   • A certificate from a bank stating that the applicant is financially sound and capable of establishing a CNG station.
7. Partnership Deed:
   • In case of a partnership, a partnership deed along with copies of CNICs of all partners.
8. National Identity Card:
   • Attested copies of the National Identity Cards (NICs) of the applicant(s).
9. NOC from Gas Company:
   • A No Objection Certificate (NOC) from the concerned gas company regarding the sale of RLNG only, as per the attached format.
10. NOC from Oil Marketing Company:
    • An NOC from the concerned Oil Marketing Company (OMC) if the CNG station is being constructed on an OMC outlet.
11. Affidavit:
    • An undertaking on an affidavit (original), inter alia, covering that the site is litigation-free, the application is only for RLNG-based CNG, and the applicant/licensee cannot claim conversion to indigenous gas. It should also confirm that the proposed CNG station or any new works will not be located in any residential area and will maintain a minimum distance of 100 feet from any residential building or area. This must be verified by the TPI at the time of site verification.
12. CVs of Technical Staff:
    • Curriculum vitae of the technical staff to be deputed.
13. Feasibility Report:
    • A detailed feasibility report.

Checklist for Renewal of CNG Marketing Licence

To renew an existing CNG marketing licence, the following steps and documentation are required:

1. Affidavit/Undertaking:
   • An affidavit or undertaking in the prescribed format regarding the renewal of the CNG marketing licence, duly signed by the authorized signatory/partners and issued by a notary public.
2. Renewal Fee:
   • A Pay Order/Bank Draft of Rs. 25,000/- in favour of OGRA, Islamabad, for the renewal of the CNG production and marketing licence.
3. Explosive Licence:
   • An attested copy of a valid Explosive Licence (Form-B) granted by the Department of Explosives for the CNG station.
4. NOC or Lease Agreement:
   • An original NOC from the Oil Marketing Company regarding the renewal of the CNG marketing licence or an attested copy of a valid lease agreement signed between the Oil Marketing Company and the CNG station, clearly mentioning the execution date, validity date, expiry date, and exact site address (if applicable).
5. Penalty:
   • Applicable penalties as per the schedule provided below:
     • If formalities are completed before three months of the licence expiry: Not applicable.
     • If formalities are completed before the expiry of the licence but not before three months: Rs. 50,000/- penalty (if applicable).
6. Annual Inspection Fee:
   • Evidence of payment of the annual inspection fee for the current year.
7. Third Party Inspection Report:
   • The latest TPI proforma duly signed by a third-party inspector. Note that the application will only be considered if the CNG station is declared compliant with the CNG Rules, 1992.
8. Affirmation/Certification:
   • An affirmation or certification that all information and documents submitted with the application are correct and true in all respects and that all requisite formalities have been fulfilled. Any missing or incomplete formalities may result in the application being returned without consideration, and the applicant will not object to this action by OGRA.

Frequently Asked Questions (FAQs)

1. What are the applicable rules for the CNG sector?

• The Pakistan CNG (Production & Marketing) Rules, 1992.

2. What are the relevant rules for renewing a CNG marketing licence?

• Rule 7(ii) and Rule 7(iii) of the CNG Production & Marketing Rules, 1992.

3. What is the time period defined in the CNG Rules, 1992 for applying for a renewal of a CNG marketing licence?

• Ninety (90) days before the expiry of the CNG marketing licence.

4. If a licensee applies before the expiry of the marketing licence but not before 90 days, does it qualify for renewal?

• Yes, but subject to a Rs. 50,000/- penalty and completion of other applicable formalities.

5. If a licensee applies after the expiry of the marketing licence, does it qualify for renewal?

• Yes, but subject to a Rs. 100,000/- penalty and completion of other applicable formalities.

6. What is the fee for renewing a CNG marketing licence?

• The renewal fee for a CNG marketing licence is Rs. 25,000/-.

7. What is the mode of payment for submission of penalties or fees to OGRA?

• Penalties and fees must be paid via Demand Draft or Pay Order in favour of OGRA, payable at Islamabad.

8. Is Form-B required for the renewal of a marketing licence?

• Yes, a valid/renewed Form-B is required for the renewal of a CNG marketing licence, along with other applicable formalities.

9. Do documents submitted to OGRA for licence renewal need to be attested?

• Yes, documents must be attested by a Class-1 Gazetted Officer or a Notary Public.

10. Do annual inspection fees need to be cleared for a CNG station intending to renew its marketing licence?

• Yes, there should be no pending inspection fees or dues against the CNG station intending to renew its marketing licence.

11. Does a CNG station need to comply with the CNG Rules, 1992 to acquire renewal of its marketing licence?

• Yes, compliance must be verified through a third-party inspection report of the concerned CNG station.

12. Is an NOC from the concerned Oil Marketing Company required for the renewal of a CNG marketing licence?

• Yes, but only if a petrol pump is established on the premises of the concerned CNG station.

13. Do licensees need to submit an affidavit confirming there is no change in the physical location of the CNG station for licence renewal?

• Yes, an affidavit in the prescribed format confirming no change in the physical location of the CNG station must be submitted.

14. Should there be no pending court cases restricting OGRA from renewing a CNG marketing licence?

• Yes, this must be confirmed through a prescribed affidavit submitted by the licensee.

15. Is a confirmation letter required from the Explosives Department for the renewal of a CNG marketing licence?

• Yes, a confirmation letter from the Explosives Department indicating that Form-B is granted after completing applicable formalities/safety rules is required.

16. Why is the renewal of every CNG marketing licence mandatory?

• Operating any CNG station without a valid CNG marketing licence is a violation of Rule-3 of the CNG Rules, 1992. Therefore, a valid licence is mandatory for the operation of any CNG station.

17. Should a request for the renewal of a CNG marketing licence be submitted on the official letterhead of the concerned CNG station?

• Yes, the renewal request must be submitted on the letterhead of the concerned CNG station.

18. Must a formal request for the renewal of a CNG marketing licence be signed by an authorized signatory?

• Yes, the formal request for renewal must be signed by an authorized signatory of the concerned CNG station.

19. Does the renewal of a CNG marketing licence require permission from the competent authority?

• Yes, every CNG marketing licence renewal requires the approval of the Authority, subject to the completion of applicable formalities.

20. What is the estimated time required for the renewal of a CNG marketing licence after all applicable formalities are completed?

• The renewal process typically takes 10-15 days, subject to the completion of the Authority’s quorum.

21. For how long can a CNG marketing licence be renewed after its expiry, as per the CNG Rules, 1992?

• A CNG marketing licence can be renewed for a period of five (05) years from the date of its expiry.

22. Can a CNG marketing licence be extended multiple times?

• Yes, a CNG marketing licence can be renewed multiple times, each for a maximum period of five years from its expiry.

Conclusion

Navigating the regulatory landscape for obtaining and renewing licences for CNG operations in Pakistan involves meticulous preparation and adherence to the comprehensive requirements set forth by OGRA. Josh and Mak International is committed to providing expert legal assistance to guide clients through each step of the licensing process, ensuring compliance and facilitating successful outcomes.

For further information and assistance, please contact Josh and Mak International. Our team of legal experts is dedicated to offering tailored solutions to meet your business needs in the CNG sector.