Pakistan orders Shell subsidiary to pay $2.4 million in damages for oil tanker blast

Islamabad: Pakistan's oil and gas regulator on Friday ordered a subsidiary of Royal Dutch Shell to pay about 257 million Pakistani rupees ($2.4 million) in damages and compensation for a tanker explosion that killed more than 200 people.

The Oil and Gas Regulatory Authority (OGRA) has held Shell Pakistan Ltd (SPL) responsible for the blast in Punjab province on 25 June after the tanker carrying gasoline for the company rolled over, and villagers rushed to collect leaking fuel.

The road accident was caused by "non-professional driving/ vehicle being lesser than required specs", the authority said in a report seen by Reuters.

"The report shows that they have completely ignored the safety standards of the vehicles procured from the contractors," OGRA spokesman Imran Ghaznavi told Reuters, referring to Shell Pakistan.

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Pakistani rescue worker and hospital staff transport a victim of oil tanker explosion at a hospital in Multan, Pakistan. AP[/caption]Shell Pakistan has said the tanker was owned by a contractor it hired to transport its fuel.

At least 217 people were killed in the explosion and 61 were injured, according to Amir Mehmood, spokesman for Victoria Hospital in nearby Bahawalpur city.

The energy regulator ordered Shell Pakistan to pay a penalty of 10 million rupees ($95,000).

In addition, the regulator ordered the company to pay one million rupees ($9,400) in compensation to the families of each of those killed and half a million ($4,700) for each person injured.

The regulator also ordered the company to upgrade its "infrastructure" in line with its standards.

The company has the right to appeal against the fine and compensation demand, he said.

The regulator also criticised police and highway authorities for failing to cordon off the accident site.

A separate government inquiry into police conduct was being carried out, said Punjab provincial government spokesman Malik Muhammed Ahmed Khan.

The chairwoman of the OGRA, Uzma Adil Khan, said many fuel companies were not meeting safety requirements introduced in 2009, and the regulatory body had been slow to enforce them.

"This incident is certainly a wake-up call for all of us," she said.

The vice chairman of the Pakistan's oil tankers association, Zaman Khan, said the accident last month was an anomaly."Tankers meet international standards," he said.