Pakistan Incurs Rs. 103 Billion Loss Due to Delay in Finalizing RLNG Prices

The Auditor General of Pakistan has stated that the Oil and Gas Regulatory Authority (OGRA) has failed to discharge its regulatory function regarding notification of the final RLNG price resulting in the accumulation of a huge amount of Rs. 103 billion. The AGP in its audit report 2023-24 observed that OGRA has failed to notify the final RLNG price since the start of import of RLNG in 2015. This has resulted in multiple issues of payment between buyers and sellers of RLNG. For instance, an estimated value for a differential amount of Rs. 103 billion had accrued on SNGPL as payable to PSO and PLL. Further, SNGPL was also facing legal issues with the consumers of RLNG due to the non-finalization of price. According to Section 6(2)(r) of OGRA Ordinance 2002, “the Authority administers or establishes prices for those categories of petroleum for which the Federal Government establishes prices and may delegate the function to the Authority from time to time.” The DG (Gas) in 2016 issued guidelines for the determination of the sales price of RLNG after approval from the ECC of the Cabinet and advised to implement the decision of the ECC. The Audit was of the view that the OGRA failed to discharge its regulatory function regarding notification of final RLNG price resulting in the accumulation of a huge amount of Rs. 103 billion. The matter was reported to OGRA in August 2023. In the DAC meeting held on January 03, 2024, OGRA stated that scrutiny of data regarding the determination of RLNG prices was at the final stage and final RLNG prices would be notified by March 2024. The DAC directed OGRA to notify final RLNG prices at the earliest and no further progress was reported till the finalization of the report. Audit recommends finalizing RLNG prices without further delay and fixing responsibility on the persons at fault for the delay in finalization of the price of RLNG.