Pakistan’s Petroleum Sector Faces Rs. 2.05 Trillion in Financial Irregularities: AGP Report
ISLAMABAD –
A recent report by the Auditor General of Pakistan (AGP) has uncovered massive financial and operational irregularities exceeding Rs. 2.05 trillion in the country’s petroleum sector, raising serious concerns about governance, transparency, and fiscal responsibility.
Unsettled Circular Debt and Mismanagement
The AGP revealed that Rs. 1.43 trillion in inter-corporate circular debt remains unresolved, continuing to burden the national economy. Furthermore, Rs. 350 billion collected under the Gas Infrastructure Development Cess (GIDC) has not been utilized for its intended purpose—namely, major transnational pipeline projects.
Additionally, Rs. 69 billion is still pending recovery from Sui gas companies, highlighting systemic inefficiencies in revenue collection.
Major Losses and Project Delays
The report detailed a range of operational lapses:
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Sui Northern Gas Pipelines Limited (SNGPL) diverted RLNG to domestic consumers, leading to Rs. 53 billion in losses due to winter load management violations.
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Delays in the installation of gas compression equipment cost the sector an estimated Rs. 44 billion.
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OGDCL’s failure to rein in expenses in unprofitable oil and gas fields led to a profit reduction of Rs. 32.6 billion.
Uncollected Royalties and Dubious Contracts
Royalties worth Rs. 28 billion from exploration companies were not recovered, while contracts worth Rs. 15.28 billion were awarded to inexperienced bidders due to poor technical evaluations. Moreover, a petroleum levy of Rs. 14.63 billion went uncollected from a refinery, a cost ultimately borne by consumers.
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Additional Financial Lapses
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Rs. 10.45 billion was unnecessarily spent on pipeline projects.
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A Rs. 9 billion cost hike resulted from delays in recovering gas pipelines.
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Rs. 7.49 billion worth of gas development schemes remain incomplete.
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Failures in oil production enhancement efforts led to Rs. 2.3 billion in lost revenue.
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PSO and SNGPL withheld Rs. 1.5 billion in shareholder dividends.
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OGDCL is still owed Rs. 847 million from joint venture partners.
Call for Reforms
The AGP has recommended urgent action to resolve the circular debt issue, expedite critical pipeline infrastructure, and improve overall transparency and efficiency within the petroleum sector.
This comprehensive audit underscores the need for stronger oversight, better project management, and improved fiscal discipline to protect national resources and restore public trust.
