Centre moves to limit CCI role in oil, gas affairs

The federal government is considering a new approach under which routine administrative matters related to the oil and gas sector would not require approval from the Council of Common Interests (CCI).

The move could, however, trigger concerns among the provinces, which are represented in the CCI. Federal officials believe that routine operational decisions concerning oil and gas entities fall within the existing authority of the federal government and relevant provincial administrations.

Under the proposed interpretation, the CCI would be approached for major policy matters rather than routine administrative decisions. New oil and gas policies, as well as amendments to existing policies, would continue to require approval from the council.

Officials also maintain that regulatory decisions should be taken by the relevant regulators in accordance with existing laws, policies and rules.

The federal government is relying on Article 154 of the Constitution, which outlines the functions of the CCI. The article empowers the council to formulate and regulate policies concerning matters listed in Part II of the Federal Legislative List and to supervise and control the institutions concerned.

The scope of the CCI’s authority has remained a subject of debate, particularly following the 18th Constitutional Amendment.

The issue was previously raised by the Khyber-Pakhtunkhwa government over oil and gas decisions being taken through the Economic Coordination Committee (ECC). The matter was discussed by the ECC in April 2012, after which it was suggested that the jurisdiction of the CCI and ECC should be referred to the CCI for a policy decision.

The Law and Justice Division had also examined the matter. Its opinion was that policy decisions requiring new legislation or changes to existing laws should be placed before the CCI. However, routine affairs of the federal government and related institutions did not necessarily require CCI approval.

The legal position was based partly on judgments of the superior judiciary, including a case involving Ghafoor Textile Mills and Wapda. The Supreme Court examined the meaning and scope of terms such as “formulate”, “regulate”, “supervise” and “control” in relation to the CCI’s constitutional mandate.

Following the legal opinion, major oil and gas policies were placed before the CCI for approval. These included petroleum exploration and production policies, gas pricing criteria for marginal and stranded fields, tight gas policy, low-BTU gas policy and LPG production and distribution policy.

Routine administrative matters, meanwhile, continued to be dealt with by the federal cabinet and its committees, including the ECC.