Auditor General Uncovers Rs. 2.05 Trillion Irregularities in Oil & Gas Sector

The Auditor General’s latest report has exposed massive financial and operational irregularities exceeding Rs. 2.05 trillion in Pakistan’s oil and gas sector, pointing to unresolved circular debt, mismanagement of funds, and significant project delays.

The report reveals that Rs. 1.43 trillion in inter-corporate circular debt remains unsettled, while Rs. 350 billion collected under the Gas Infrastructure Development Cess (GIDC) was not utilized for planned transnational pipeline projects. Additionally, the government failed to recover Rs. 69 billion from Sui gas companies.

Operational lapses included the diversion of RLNG to the domestic sector by Sui Northern, causing losses of up to Rs. 53 billion due to winter load management violations, and a Rs. 44 billion loss from delays in installing gas compression equipment. OGDCL’s inability to cut costs in unprofitable fields reduced profits by Rs. 32.6 billion, while Rs. 28 billion in royalties from exploration firms remained uncollected.

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Further findings showed poor technical bid evaluations, with Rs. 15.28 billion in contracts awarded to inexperienced bidders, a Rs. 14.63 billion petroleum levy not collected from a refinery (costs passed to consumers), unnecessary capital expenditure of Rs. 10.45 billion on pipelines, and a Rs. 9 billion increase in costs due to delays in gas recovery projects. Incomplete gas schemes worth Rs. 7.49 billion also remain unresolved.

Losses from stalled oil production reached Rs. 2.3 billion, while PSO and Sui Northern withheld Rs. 1.5 billion in dividends, and OGDCL did not receive Rs. 847 million from joint venture partners.

The Auditor General has urged immediate action to resolve circular debt, speed up pipeline projects, and eliminate delays in critical petroleum sector initiatives.