Pakistan is a unique country in which the authorities seem incapable of learning from past experience. Here we are in the middle of trying to unravel the Independent Power Producers’ (IPPs’) ‘Take or Pay’ conundrum, the wisdom having dawned three decades after this idea was mooted that it does not take cognizance of market fluctuations, thereby landing the country in impossible financial trouble.

The initial 1994 induction of IPPs taught us nothing, and was duly followed by another round in the 2010s, landing us with further burdens of paying for electricity whether taken or not.

Some sceptics allude to murkier reasons than simply an inability to learn from the track record, corrupt practices being top of the list. Someone, somewhere, they allege, made a lot of money out of this (repeated) skullduggery.

Now we are confronted with the Oil and Gas Regulatory Authority’s (OGRA’s) brilliant suggestion that the Oil Marketing Companies (OMCs) adopt a ‘Take or Pay’ model in their fresh Sale and Purchase Agreements (SPAs) to either lift their allocated petroleum product quotas from local refineries or pay penalties for failing to do so.

This is ostensibly meant to support local refineries by ensuring them a guaranteed offtake, thereby reducing excessive fuel imports that were undermining domestic production, causing reduced capacity utilisation and financial losses.

An added grey area is the accusation by some OMCs and refineries that a specific OMC was being favoured by OGRA through approving petrol and diesel imports despite sufficient local stock availability. As the criticism of OGRA mounted, it proposed the new brilliant ‘Take or Pay’ arrangement.

The Oil Marketing Association of Pakistan (OMAP) has expressed grave concerns regarding........

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