ISLAMABAD: Auditor General of Pakistan uncovered anomalies amounting to Rs71.8 billion in the Ministry of Energy (Petroleum Division). Anomalies of Rs11.7 billion were also raised in Oil and Gas Development Company Limited (OGDCL), Rs197.26 billion in Pakistan Petroleum Limited (PPL) and to Rs46.75 billion in Pakistan State Oil Company Limited (PSO).
According to the audit report 2022-23, the irregularities worth Rs71.8 billion were pointed out by AGP, in the Ministry of Energy (Petroleum Division) which also includes recoverable of Rs52,673.060 million.
The audit recorded the irregularities as following: (i) assessment and realisation of GIDC (Gas Infrastructure Development Cess) and GDS (Gas Development Surcharge) amounting to Rs28.4 billion; (ii) Assessment and realisation of petroleum levy and windfall levy Rs4 billion; (iii) assessment and realisation of royalties on crude oil and gas amounting to Rs17.7 billion; (iv) Issues related to oil costing Rs1.3 billion, while other irregularities amounting to Rs20.5 billion.
During the audit of DG (Gas), Islamabad, for the FY 2021-22, it was observed that DG (Gas) did not realise GDS amounting to Rs24,519 million from various companies, (PPL Rs14.81 billion and MPCL 9.7 billion) in respect of gas sold to fertiliser and power companies.
Further, no time limit had been prescribed for end-users/ consumers to pay outstanding amount to gas utility companies or E&P companies. This had given leeway to companies to withheld outstanding amount.
During the audit of DG (Oil), Islamabad, it was observed that M/s Cnergyico Limited on the one hand paid less amount of petroleum levy on the sale of refined petroleum products and on the other hand deposited petroleum levy with considerable delay which necessitates LPS.
In another case, invoices issued by M/s Cnergyico Limited to different OMCs for the sale of POL products were shown missing in the monthly sales summary of refinery. This led to short-realisation of petroleum levy and LPS amounting to Rs3.9 billion.
Audit observations amounting to Rs11.7 billion were also raised during the audit of the OGDCL. This also includes recoverable amount of Rs3.1 billion.
The audit recorded the irregularities as following, (i)Project management-related irregularities costing Rs3.13 billion; (ii) HR/ employees-related irregularities amounting Rs1.25 billion; (iii) Joint venture-related issues Rs1.25 billion; (iii) Contract management amounting Rs279.9 million; (iv) Procurement and Store Management-related irregularities Rs3.7billion and receivables/ financial management costing Rs324.6 million and other irregularities recorded as Rs1.7 billion.
The report also stated the irregularities amounting to Rs197.259 billion in Pakistan Petroleum Limited (PPL). This amount also includes recoverable of Rs176,117.274 million as pointed out by the audit.
During the audit of PPL for the FY 2021-22, it was observed that in four cases, the management filed insurance claims of Rs159.200 million to NICL against damages occurred in the equipment and installations at PPL fields during April 2018 to February 2020.
However, the management failed to recover insurance claims after lapse of long time. This resulted in the non-settlement of insurance claims of Rs159.200 million.
The audit was of the view that it was a failure on the part of management for non-resolution of the matter within 90 days as envisaged in Section 118(I) of the ordinance.
The matter was reported to the management in September 2022. In a DAC meeting held on January 11, 2023, the management explained that one insurance claim relating to “Fire incident at SNGPL line” amounting to Rs12.810 million had been settled by NICL and documents were also shared with the auditors and the remaining three claims were being pursued with NICL.
The DAC reduced the para to the extent of recovered/ settled and verified amount of fire incident claim and directed to expedite the recovery in remaining cases within one month. No further progress was reported till finalisation of the report.
It was also observed that GENCO-II had taken only 34,890 MMCF gas only against the committed volume of 72,000 MMCF meaning thereby off taking a less quantity of 37,110 MMCF from Kandhkot Gas Field. Due to less off-take by the GENCO, PPL was forced to curtail its daily production of gas. This resulted in a revenue loss of Rs21,142.107 million due to less production of gas/ lesser off-take.
It was observed that an amount of Rs175,958.074 million was lying outstanding against various customers, as on June 30, 2022. Out of the total outstanding dues, the aging of an amount of Rs96,614.109 million was three months to one year, whereas, according to the agreement the permissible time frame was up to 30 days of the sales invoice.
After allowing a lead period, non-recovery of outstanding balances beyond 90 days was a serious matter. Under the Rule in case of default by the customers, Late Payment Surcharge (LPS) was also leviable. This resulted in non-recovery of outstanding default amount from various customers of Rs175,958.074 million and non-charging of late payment surcharge.
Audit observations amounting to Rs46.75 billion were raised in this report during the current audit of Pakistan State Oil Company Limited (PSO). This amount also includes a recoverable of Rs42.4 billion.
During the audit of PSO for the FY 2021-22, it was observed that the management failed to recover receivables amounting to Rs33,871.180 million from bulk customers like OGDCL, Railways, Aviation, credit cards, retailers and COCO sites etc. as on June, 30, 2022.
It was also observed that management failed to recover outstanding receivables (circular debt) amounting to Rs8,501.751 million from HUBCO on account of supplies of POL products despite a lapse of considerable time up to June 30, 2022.
Copyright Business Recorder, 2023
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