The Punjab government has called for representation of all provincial governments in the Oil and Gas Regulatory Authority (Ogra), alongside federal representation, as provincial governments have raised concerns over a federal proposal to reduce the involvement of the Council of Common Interests in routine administrative matters related to the oil and gas sector. The federal government has circulated a summary proposing that day-to-day administrative matters concerning hydrocarbons should not require submission to the Council of Common Interests, prompting responses from Punjab, Sindh, Khyber-Pakhtunkhwa and Balochistan.
The federal proposal has been circulated among several government institutions and provincial administrations for their comments. These include the ministries of finance, planning, development and special initiatives, and law and justice, along with the Cabinet Division and Attorney General for Pakistan. The governments of Punjab, Sindh, Khyber-Pakhtunkhwa and Balochistan have also been asked to provide their views on the proposed changes. The consultation has brought the constitutional relationship between the federal government and provinces in the oil and gas sector into focus, particularly regarding regulatory authority and the role of the Council of Common Interests.
Punjab has partially supported the federal proposal, maintaining that regulatory bodies should function independently according to prevailing laws, rules, regulations and policies. At the same time, the provincial government has proposed that regulatory bodies should include representatives from all provincial governments as well as the federal administration. Under Punjab’s proposed arrangement, a provincial government that is dissatisfied with a regulatory or administrative decision would have the option of referring the matter to the Council of Common Interests. This approach would retain a mechanism for provincial concerns to be considered while allowing regulatory bodies to carry out their responsibilities.
Sindh has objected to the proposal to reduce the Council of Common Interests’ involvement, citing Article 172(3) of the Constitution. The provincial government said the constitutional provision provides for joint and equal ownership between the federal government and a province over oil and gas located within that province or its adjacent territorial waters. Sindh maintained that this constitutional position gives provinces an equal title in the relevant resources and the right to dispose of oil and gas alongside the federal government as co-licensors.
Sindh has therefore proposed changes to the federal summary so that administrative matters involving entities operating in the oil and gas sector would fall within the jurisdiction of both the federal government and the respective provincial government. Under its proposed approach, such matters would not necessarily need to be submitted to the Council of Common Interests. The provincial government’s position places emphasis on direct federal-provincial involvement in the administration of oil and gas entities while also referring to the constitutional ownership framework governing these resources.
Khyber-Pakhtunkhwa has also stressed the constitutional role of provinces in matters concerning oil and gas. The provincial government said Parliament’s legislative powers cannot be denied, but argued that such powers cannot be exercised contrary to what it described as the “true letter and spirit” of Article 172(3). Its position similarly focuses on maintaining the constitutional role of provinces in decisions concerning natural resources and the operation of the federal and provincial governments within the sector.
Balochistan has taken the position that policy matters and amendments concerning the oil and gas sector should continue to be formulated with the approval of the Council of Common Interests. It said regulatory decisions should be taken by the relevant regulator under rules and guidelines established at the CCI level. The province argued that excluding the Council of Common Interests from administrative matters would not be consistent with Articles 154, 156 and 172(3), read with Entry 2 of the Fourth Schedule of the Constitution.
Balochistan further maintained that Articles 154 and 172(3) place matters concerning policy guidelines and the exercise of executive authority within the framework of the Council of Common Interests and the provinces. It said the council should continue to deliberate on and provide policy guidance concerning the scope and modalities of executive authority exercised by the federal and provincial governments in the operational and management framework for mineral oil and natural gas.
The differing provincial responses have placed the proposed changes to the administrative framework of the oil and gas sector under further discussion. While Punjab has called for provincial representation within regulatory bodies, Sindh, Khyber-Pakhtunkhwa and Balochistan have raised concerns centred on the constitutional position of provinces. The federal proposal remains subject to consultation with the relevant ministries, institutions and provincial governments before any changes to the existing administrative arrangement are finalised.
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