ISLAMABAD: The federal government is working on a plan to exclude routine administrative matters concerning oil and gas companies from the purview of the Council of Common Interests (CCI), a move that could trigger resistance from the provinces.
According to sources, the federal government does not want to seek CCI approval for day-to-day administrative affairs in the gas sector, arguing that such matters fall within the respective jurisdictions of the federal government and provincial administrations.
Policy Decisions to Remain Subject to CCI
Several oil and gas-related decisions are currently being taken by the federal cabinet and the Economic Coordination Committee (ECC).
The federal government maintains that routine administrative matters concerning the management and operations of oil and gas entities do not require consideration by the CCI. However, it acknowledges that new oil and gas policies, as well as amendments to existing policies, must be placed before the CCI for approval.
Similarly, regulatory decisions should be taken by the relevant regulators in accordance with existing legislation, policies and rules, the government maintains.
The move is being linked to the implementation of Article 154 of the Constitution, which defines the functions and rules of procedure of the CCI. The article states that the Council shall formulate and regulate policies relating to matters listed in Part II of the Federal Legislative List and exercise supervision and control over the related institutions.
Jurisdictional Dispute
The interpretation and implementation of Article 154 has remained a subject of debate at various forums, particularly following the 18th Constitutional Amendment.
Officials said the issue of oil and gas-related decisions being taken through the ECC was previously raised by the Khyber Pakhtunkhwa (K-P) government through a letter to the Cabinet Division.
The matter was subsequently placed before the ECC in April 2012. After considering the K-P government’s position, the ECC decided that the question of jurisdiction between the CCI and ECC in matters covered under Part II of the Federal Legislative List should be referred to the CCI for a policy decision.
Law Division’s Interpretation
At the time, the Ministry of Petroleum also sought an opinion from the Law and Justice Division.
The Law Division held that policy decisions requiring new legislation or affecting existing legislation must be placed before the CCI for approval, while routine matters concerning the day-to-day functioning of the federal government and relevant institutions do not require CCI consideration.
The legal opinion was based, among other things, on judgments of the superior judiciary. In the case of Ghafoor Textile Mills vs Wapda, the Supreme Court examined the meaning and scope of terms including “formulate”, “regulate”, “policy”, “control” and “supervise” and laid down relevant guidelines.
The Law Division subsequently maintained that the CCI was not required to take decisions concerning the routine operations of corporations listed in Part II of the Federal Legislative List or related institutions.
It also held that the CCI was not required to determine or periodically revise electricity tariffs, as such revisions constituted part of the day-to-day functioning of the relevant institutions. Electricity tariffs, the opinion noted, are subject to frequent changes due to fluctuations in various underlying factors.
Policies Submitted to CCI
Following the Law Division’s interpretation, the Petroleum Division submitted policy matters requiring CCI approval, including:
Petroleum (Exploration and Production) Policy and subsequent amendments;
Marginal and Stranded Gas Fields – Gas Pricing Criteria and Guidelines;
Tight Gas (Exploration and Production) Policy and subsequent amendments;
Low BTU Gas Policy; and
LPG (Production and Distribution) Policy.
However, matters unrelated to policy formulation and concerning the routine administrative affairs of the federal government have continued to be placed before the federal cabinet and its committees, including the ECC, for executive decisions.
The proposed approach could nevertheless reignite the longstanding debate over the respective constitutional roles of the federal government, the ECC and the CCI, particularly given the provinces’ stake in the country’s oil and gas resources.
Story by Zafar Bhutta
