Karachi, November 4, 2024 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed essential amendments to the Petroleum Act of 1934, emphasizing the need for modernization to address the evolving demands of the petrochemical industry.
The proposal highlights key areas for revision, focusing on more efficient handling, storage, and licensing procedures for liquid hydrocarbons and related products.
FPCCI President Atif Ikram Sheikh commended Senator Musadik Malik, the Federal Petroleum Minister, and the Ministry of Petroleum’s Director General of Explosives for engaging with industry concerns regarding the outdated regulatory framework. “The FPCCI appreciates the responsiveness of the ministry in addressing trade and industry’s concerns, particularly around the definitions and requirements tied to hydrocarbon materials,” Sheikh remarked.
Sheikh noted that FPCCI initially sought clarification on licensing and storage issues after receiving numerous inquiries from the sector. While the Ministry of Petroleum provided responses, Sheikh stressed that substantive changes to the nearly century-old Petroleum Act are necessary. “The 1934 Act no longer aligns with the modern dynamics of the petrochemical sector. Revisions are needed to create an environment that supports industry growth,” he asserted.
Saquib Fayyaz Magoon, Senior Vice President of FPCCI, outlined specific recommendations, urging that the Act be revised to eliminate outdated or redundant provisions and to emphasize relevant safety and precautionary measures. “The petrochemical industry has evolved substantially over recent decades. Our laws must reflect these changes to enable a more efficient and competitive sector,” Magoon stated.
Magoon proposed that the products listed under Clauses A, B, and C in the Act should be handled with varying degrees of regulation. He argued that products in Clauses B and C, which generally pose lower risks, should not be subjected to the same rigorous requirements as those in Clause A. This stratification would allow for more flexible licensing, storage, and transportation measures, facilitating smoother operations for the industry.
In addition, Magoon recommended postponing the amendment introduced to the Act on August 5, 2023, which added stringent licensing clauses for certain hydrocarbon products. He warned that enforcing these regulations could result in supply shortages for critical raw materials, impacting industries reliant on petrochemical inputs. “Deferring these amendments will help avert disruptions in the petrochemical supply chain, which is vital for numerous sectors,” he added.
The FPCCI’s call for modernization of the Petroleum Act 1934 underscores the need for regulatory frameworks that keep pace with industry advancements. As Pakistan’s petrochemical sector continues to expand, industry leaders and policymakers will need to collaborate to ensure regulations promote growth while maintaining necessary safety standards.
